Mr Osborne said that "more and more homes are being bought as buy-to-lets or second homes", and that many of them are cash purchases that aren’t affected by the restrictions introduced in the Budget on mortgage interest relief.
Adding: "Frankly, people buying a home to let should not be squeezing out families who can’t afford a home to buy. So I am introducing new rates of Stamp Duty that will be 3 per cent higher on the purchase of additional properties like buy-to-lets and second homes. It will be introduced from April next year and we’ll consult on the details so that corporate property development isn’t affected.
This extra stamp duty raises almost a billion pounds by 2021 – and we’ll reinvest some of that money in local communities in London and places like Cornwall which are being priced out of home ownership. The funds we raise will help building the new homes."
IF THE CHANCELLOR WANTS TO WIPE OUT BUY TO LET, WHY DOESN’T HE JUST SAY SO?
Richard Lambert, CEO at the National Landlords Association, said: “The Chancellor’s political intention is crystal clear; he wants to choke off future investment in private properties to rent.
The exemption for corporate investment makes this effectively an attack on the small private landlords who responded to the housing crisis by putting their own money into providing homes by the party that they put their faith in at the election.
If it’s the Chancellor’s intention to completely eradicate buy to let in the UK then it’s a mystery to us why he doesn’t just come out and say so”.
Paul Smee, Director General at CML said: “Additional stamp duty on buy-to-let transactions comes hot on the heels of the forthcoming tax changes to landlords already announced. Government will need to keep a careful eye on the cumulative effects; with the private rented sector housing around a fifth of the population, we do need to avoid unintended consequences."
David Cox, managing director, Association of Residential Letting Agent (ARLA), says: “The news in today’s Autumn Statement that the Chancellor will increase stamp duty tax on buy-to-let (BTL) properties by 3% in April 2016 is catastrophic news for the private rental sector, especially following the recent changes to mortgage interest tax relief and the annual wear and tear allowance. Increasing tax for landlords will increase rents and reduce property standards for tenants.
To make owning a BTL property financially viable, landlords will need to pass on the increased stamp-duty costs to tenants, who will in turn see less spent on maintaining their property and of course see increased rents. The changes will also deter new landlords from entering the market, pushing the gap between dwindling supply of available property and growing demand even further apart, which will also – in turn – push up rental costs. The Capital, where demand is so strong and last year’s stamp duty changes hurt, rather than helped, will see tenants having the greatest burden to bear.”
Stuart Law, CEO at Assetz for Investors, had this to say: "The announcement of the new 3% stamp duty premium for Buy-to-Let purchases from April next year, Buy-to-Let investors have been robbed a second time (following the new ‘tenant tax’ or tax on Buy-to-Let mortgage interest payments for higher rate tax payers) yet are providing something invaluable; homes for rent when saving for a deposit and home ownership is increasingly out of reach of many. It must also be remembered that, although the bias in the UK is toward property ownership, renting is the desired lifestyle choice for many who want to live in the most desirable areas, near their place of work and have the flexibility to move on without the restrictions ownership can bring.
“The Buy-to-Let investor should not be blamed for house price rises, rather, this is down to the chronic shortage of housebuilding in this country which is compounded by population growth. We would therefore advise caution against penalising this group of investors when actually other policy areas hold the key to unlock the solution.”
Alex Gosling, CEO, online estate agents HouseSimple.com, said: "Ouch. That's another blow to landlords, so soon after the cut in mortgage interest tax relief. In the space of two announcements, George Osborne has become Enemy No1 for the buy-to-let sector.
We are likely to see a stampede over the next year to purchase buy-to-let properties before the stamp duty hike comes into force.
But the future is now decidedly uncertain for the UK's buy-to-let sector. It seems like the Government has forgotten, or just ignored the large number of amateur buy-to-let landlords who aren't looking to make vast fortunes, but are just looking to supplement their incomes.
Hopefully, this hasn't sounded the death knell for buy-to-let."
Jonathan Hopper, managing director, buying agents Garrington Property Finders, added: "Landlords are under attack again. It's Osborne's buy-to-let double whammy. The buy-to-let sector is only just recovering from the last Budget announcement cutting mortgage interest tax relief. Now, new buy-to-let landlords are going to get sledge-hammered with a bigger stamp duty tax bill.
Why does Osborne have such a grudge against the buy-to-let sector? "This is the sector that propped up the housing market during the hard times post credit crunch. How quickly the Government forgets.
With rents still rising and a lack of rental properties, deterring landlords from entering the market is surely only going to put more pressure on rents.
Is Osborne trying to destroy the buy-to-let sector, because that's what it looks like.He's so focussed on home ownership, he's abandoning the millions of people who rent in this country."
