Landlords hope for stamp duty cut
Do any of the following extracts from a column written by a London landlord that appears each week in a popular free newspaper leave you nodding in agreement?
“I rapidly painted two of the rooms and dropped the asking price to less than I was getting three years earlier, but the flat was still empty for three weeks before I found a tenant.”
“Can you imagine re-entering your rental property after the tenant has gone, discovering quite unspeakable stuff on the carpets, a filthy mattress, bin bags full of smelly rubbish strewn about in rooms reeking of cigarettes — and sighing with relief? That’s what I did.”
“He bombarded me with texts one Saturday requesting a viewing as soon as possible and when I didn’t respond immediately, due to the fact that I was manoeuvring an overloaded trolley round Sainsbury’s, he started ringing and leaving increasingly frantic messages.”
Don’t let the unfortunate experiences of one buy-to-let investor put you off becoming a London landlord.
Landlords are a key element of the housing ecosystem, with the private rented sector accounting for around one in five properties.
Despite the amount of mortgage interest relief that landlords can reclaim being gradually cut back to 20% between 2017 and 2020, the number of private rented homes is set to increase as tenants find it increasingly difficult to afford a home of their own.
This has led to calls for Chancellor Phillip Hammond to reverse the 3% stamp duty surcharge that buy-to-let investors must pay when purchasing a rental home when he unveils his first Autumn Statement later this month.
The additional property tax was introduced by previous Chancellor George Osborne in the last Autumn Statement and came into force in April.
However, Conveyancing Association chairman Eddie Goldsmith points out: “The impact of the 3% increase in stamp duty charges for additional properties has been sizeable and we’ve seen considerable falls in buy-to-let purchase activity.”
Figures from the Council of Mortgage Lenders show that landlord borrowing was 21% down year-on-year in July, while first-time buyers’ borrowing was down 19% month-on-month, and 4% year-on-year.
“This is hardly the renaissance in first-time buyer activity we were led to believe would result from buy-to-let activity being forced downwards,” says Goldsmith.
The call to help the buy-to-let market in London has received support from the Royal Institution of Chartered Surveyors.
It says that between 2001 and 2014 the number of UK households who were renting a property rose from 2.3 million to 5.4 million and that any further investment in property by landlords had been hit by changes to stamp duty in April.
The surveyors body’s annual report states: “The RICS is urging Prime Minister Teresa May to abandon David Cameron’s previous home ownership focus and reverse April’s stamp duty measures in order to address short term rental supply issues.”
Even if stamp duty rates are cut for buy-to-let investors, a landlord’s life is not always easy.
Here at Assetgrove we can take the stress out of managing your property and ensure you receive fixed monthly payments even if your property’s not rented out.
Assetgrove offers up to 5 years guaranteed rent and will manage every single aspect of the tenancy during this period – with no monthly fees, commissions or hidden surprises to pay for. This is much easier for landlords in comparison to other services, as it’s a contractual agreement between them and us, where we take care of everything – ensuring our landlords have complete peace of mind.
For more information, contact Assetgrove today.