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New stamp duty charges designed to deter second home buyers could have a major impact on Suffolk’s rental market, claims a chartered accountant.
In Suffolk Coastal district alone there are more than 2,500 second homes with spots like Aldeburgh, Southwold and Thorpeness attracting city dwellers from London who seek a weekend retreat - something the Government hopes to redress whilst also boosting Revenue coffers.
In their bid to turn ‘generation rent into generation buy’ the Government has announced a string of changes that will make it harder for people to buy multiple homes.
Keith Senior, a director at Jacobs Allen Chartered Accountants & Chartered Tax Advisors, said: “Essentially the Government will be charging an additional 3pc in stamp duty on the end value of a property when it is sold for £40,000 or more, on anything other than your main residence.”
This means buy-to-let landlords who sell their family home will not be liable for the additional fees on their new home, but those buying additional homes for the purpose of renting out or as a second home, will be.
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“Where you are buying a house for £250,000, the ordinary stamp duty would be around £2,500, but under these changes, you would now have to pay an additional £7,500.
“When you have got people who are perhaps fairly wealthy, maybe living in London, who are looking for a home on the coast, it might make a difference between them buying a home for £250,000 or £270,000 but it won’t put them off buying a second home completely.”
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He fears the biggest impact will be on the rental market.
“The increase might deter a landlord looking to buy a single additional property to let, especially if rental returns in an area like Bury St Edmunds are low at around 4.5%. However, there’s likely to be an exemption from the additional 3% charge for a landlord going in and buying up 15 or more apartments in a new development. An investment like that might spur a development on and increase the housing stock for those who are wanting to buy their own home, which would support government policy.”
He added: “It could affect the property market on a larger scale and any reduction in the number of homes available for rent could have the effect of increasing rents generally.”