Copy article

Stamp Duty change: "Any chain with a buy-to-let purchase within it is now in a precarious position"

ended 30. October 2024

The Chancellor has just announced that the SDLT surcharge for second-homes and landlords will be increased by 2% to 5% from tomorrow. Newspage asked property market experts for their views. Most were despondent. One said: “This is another nail in the coffin of buy-to-let”; a second added: “This new stamp duty legislation could see multiple deals collapse, which will affect a lot of people.” Meanwhile, a third said: "Labour has just started divorce proceeding against the nation's landlords. This is a big mistake given that they have no credible plan for the private rental sector." View will appear below until 16:00.
 

20 responses from the Newspage community

Copy all

Star Quote
Copy

Editor
Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
This Budget has proved there is no place for buy-to-let in the UK anymore. Increasing stamp duty with imediate effect will wreak havoc on property chains that have exchanged but yet to complete. There is clearly a push for big corporate landlords rather than individual landlords which could have a damaging effect on rental prices.
Star Quote
Copy

Editor
Ben Perks
Managing Director at Orchard Financial Advisers
The Chancellor may have just killed off the buy-to-let market with immediate effect. A 2% rise in Stamp Duty by tomorrow will cause shockwaves throughout the property industry. Anyone completing on a buy-to-let purchase tomorrow has to find a few thousand pounds to continue, and this just won't be possible for many landlords. It’s a wider issue than first thought, though. Any chain with a buy-to-let purchase within it is now in a highly precarious position.
Copy

Kundan Bhaduri
Property Developer and Portfolio Landlord at The Kushman Group
The government's approach to landlords is fast resembling a Monty Python sketch: endless hoops, rising taxes, and a litany of regulations make you wonder if they’re hoping to drive every last one of us to "find something more respectable." to do, leaving aside being a 'landlord' which has already been cursed to being the job for the devil. After hiking up interest rates and slapping on tax grabs, they have the cheek to wonder why rents are up and housing options down. It’s hard to offer affordable rentals when policies squeeze us dry—landlords aren’t public services, after all. It’s high time for policies that incentivise, rather than hobble, those creating homes. This increase in stamp duty is another kick in the teeth for small landlords up and down the country.
Star Quote
Copy

Daniel Field
Managing Director at The Mortgage Dog
The Chancellor’s sudden 2% increase in Stamp Duty for second homes and landlords—raising the surcharge to 5%—could have wide-reaching effects. One of our clients saw their stamp duty rise by £3,585 with only a few hours’ notice. Why at the very least was this not deferred to April 25 in line with the wider stamp duty changes? This unexpected blow adds pressure on landlords already contending with high mortgage rates and increased regulatory demands. Keir Starmer’s previous statement that landlords are 'not working people' doesn’t reflect the reality that landlords play a crucial role in providing rental housing, especially as high-interest rates limit access to homeownership. Some may reconsider their investment plans or exit the market, reducing rental property availability and likely pushing rents higher. While the government intends to cool the buy-to-let market, it may inadvertently worsen rental shortages, driving up costs for tenants and deterring potential new landlords.
Star Quote
Copy

Matt Baldock
Director at Charles David Casson
The increase on Stamp Duty for second homes will affect more so-called 'normal people' than the much villified landlords. If there was a bubble when landlords only sold to landlords then fine, proceed with the kicking you want to give them. In reality a potential landlord is probably buying a 2 bed flat off a lovely couple buying a three bed house off someone with a young family who wants to buy a four bed off a retiring couple. The landlord's SDLT has just gone up by, say, £5,000 so he wants that off the house price. He's not emotianally invested in the purchase so can walk away. The couple he is buying from doesn't want to lose their dream home so either takes that hit, asks for it to be taken off their purchase or at best the agents (finally doing some work) speak to everyone and it gets split up the chain. So worst case this SDLT increase costs a landlord nothing but a 'normal person' £5000 or best case costs 3 'normal' people £1666.67 each. Bravo.
Star Quote
Copy

Kelsey Phillips
Head of Specialist Lending at Arose Finance
Today our Labour government has cemented a clear stance on UK landlords. Second-home SDLT contributes approximately 3% of the UK government's total tax receipts. Acknowledging the corrosion of UK property real yield over the past 3 years, increasing the levy to 5% will undoubtedly inhibit investment demand and deteriorate the return profile of an already assaulted sector.
Copy

Editor
Craig Fish
Director at Lodestone Mortgages
This is another nail into the coffin of buy-to-let. Transactions in process are now at real risk as investors may well pull out and this will have a negative impact on any property chains where a buy-to-let is involved. This is going to have a further negative impact on UK housing stock, pushing rents higher.
Copy

Editor
Tony Castle
Managing Director at PFG Mortgages
This is a huge call from the Chancellor, which could have a big impact on the housing market. The immediate increase will have a lot of people concerned. We are already hearing from some of our clients who have exchanged on a second home with completion set for tomorrow, which will now add thousands to the bill. This new stamp duty legislation could see multiple deals collapse, which will affect a lot of people.
Copy

Editor
Justin Moy
Managing Director at EHF Mortgages
A serious game changer for the property investor, making bricks and mortar far less attractive and the knock-on effect won’t take long to see. Less private landlords will provide less social housing, generating higher rent and more strain on the social state for housing - this will cost more than that 2% uplift in stamp duty from tomorrow. Housing shortages are not due to landlords buying all the property, but the lack of development over the long-term. But those landlords are the life of social housing needs, why make it worse.
Copy

Editor
Riz Malik
Independent Financial Adviser at R3 Wealth
Labour has just started divorce proceeding against the nation's landlords. This is a big mistake given that they have no credible plan for the private rental sector.
Copy

Editor
Harps Garcha
Director at Brooklyns Financial
Tomorrow will feel like Halloween for some landlords facing last-minute challenges. Imagine needing to find an additional £10,000 on a £500,000 purchase—it’s a huge ask. Some landlords have already exchanged and they are now asked to find the additional funds with no notice, what if they can't at the eleventh hour?. This shift will undoubtedly discourage landlords from investing in more Buy-to-Let properties, which could lead to a reduced supply of rental properties., especially with an unprecedented number of landlords already selling.
Copy

Editor
Dariusz Karpowicz
Director at Albion Financial Advice
Brace yourselves, landlords: the Chancellor’s got her eye on you. With the stamp duty surcharge on second homes set to jump from 3% to 5%, buying an investment property just became that much pricier. This change could be a hard hit for aspiring landlords and seasoned investors alike, especially as returns shrink in a market facing inflation and rising costs. However, with the absence of the rumoured CGT increase, many smaller landlords may see this as their moment to cash out rather than double down. It’s clear: the government’s message is loud and clear, and it’s not exactly a love letter to landlords.
Copy

Editor
Ken James
Director at Contractor Mortgage Services
Crash Bang Whallop, what a mess. Buy-to-let deals having an additonal 2% on top of the current 3% rate will create a falling domino effect on the deals that are underway at the moment. For investors to be thrown under the bus with no warning will leave a bitter taste as the market gets ripped apart with collapsing chains all around us.
Copy

Editor
Chris Barry
Director at Thomas Legal
The second home and rental sector represents abouta third of the UK property market. The rise in SDLT by an additional 2% will significantly reduce demand, which will leave institutional investors a path to clear up rental stock meaning small investors get squeezed out. The holiday home market already has a huge over supply issue and this will only make things worse for those costal towns relying on outside investment. An additional 3% SDLT was inline with other major cities around the world but adding 2% to this makes UK property disproportionately expensive.
Copy

Editor
Simon Bridgland
Director at Charwin Private Clients
If private sector landlords didn’t have a reason to leave in their droves, they have one now. They have been caught in yet more misery. The pincers of further taxation on purchases will result in less property being available in the rental sector, ultimately driving up rents for those tenants unable to buy a home of their very own. Those exiting the sector will now be on the hunt for a new home for their capital, as a once steadfast choice is made untenable for the average landlord.
Copy

Editor
Jack Tutton
Director at SJ Mortgages
So much social housing has been sold off under the 'Right to Buy' scheme, adding yet more taxes to landlords who will sell up will only greater more pressures for housing. Budget after budget, landlords have been subject to increased taxes and regulation, making to harder to justify their time and effort to provide housing to people who need it. Labour plan to build more affordable housing, this will take time and there doesnt appear to be a plan to deal with the lack of supply while these properties are built.
Copy

Amit Patel
Adviser at Trinity Finance
Increasing the surcharge to 5% may on paper seem like a great move by Reeves, however, those looking to rent will pay part of the cost as fewer properties will be made available.
Copy

Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
Whilst I'm not surprised that the Chancellor has chosen to increase the SDLT surcharge, it feels deeply unfair to give next to no notice of doing so, leaving those on the verge of completing their purchase with a very difficult decision; to either somehow find the extra money required for a higher tax bill, or walk away and lose any money they have spent already. If they have exchanged but are yet to complete, then they have no choice; they must find the extra tax money or risk being sued for breach of contract from the vendor if they now elect to not go ahead with the purchase (EDIT: further clarification indicates those that have exchanged contracts before 31/10/24 will escape the SDLT increase).
Copy

Graham Cox
Director at Bridging Hub
Whilst landlords will be crying into their penny cheaper beer tonight, first-time buyers will be raising a cheer, as more properties become available to them. This will help increase transaction volumes and improve social mobility. Overall a welcome move.
Copy

Patricia McGirr
Founder at Repossession Rescue Network
With the private rental sector already strained, this stamp duty hike is a hammer blow to landlords, many of whom are the backbone of affordable rentals. This policy risks creating a perfect storm of rising rents, diminishing rental availability, and reducing housing stability for countless renters. Instead of punitive measures, the government should be incentivising long-term rental investments to stabilise this critical sector. Without a constructive vision for private rentals, we could see a ripple effect hurting not just landlords but tenants and homeownership aspirants alike.