"Few people will argue with the need to generate more income for the public purse but to once again be going after landlords seems short-sighted, not least because it will likely result in more expensive rents for millions of renters already pushed to the limit by the high cost of living"
- Siân Hemming-Metcalfe - Inventory Base
A new analysis from Inventory Base has revealed that last week’s Autumn Budget has resulted in England’s second-home buyers facing an overnight stamp duty bill increase averaging more than £6,000.
To reveal exactly how big of a cost increase landlords and investors up and down the country are now facing when buying property in the wake of this overnight tax rise, Inventory Base has calculated the average pounds and pence stamp duty increase for purchases in England, its regions, and 12 of its major cities based on the current average house price in each location.
The data reveals that, based on England’s current average house price of £309,572, second-home buyers were, until 30th October, facing an average stamp duty tax bill of £12,266 based on the 3% additional rate.
But as of the very next day, the 31st October, the new 5% additional rate means that this tax bill now sits at £18,457 – an instant increase of +£6,191.
Regional and city impact
There are four regions of England where, due to relatively high house prices, the average second-home buyer has been hit with an even steeper stamp duty increase.
In London, where the average house price is £531,212, second-home buyers have seen their stamp duty bill grow by +£10,624 to sit at a whopping £40,621.
In the South East, an increase of +£7,696 puts the average stamp duty bill at £25,980, while the East of England and South West have seen increases of +£6,884 and +£6,415 respectively.
As for England’s major cities, Brighton isn’t far behind London, with an average tax rise of +£8,465 putting the average tax bill at £29,827, while Bristol’s increase of +£7,080 means the average second-home buyer is now paying £22,900 in stamp duty.
Siân Hemming-Metcalfe Operations Director at Inventory Base, comments: “England’s landlords have been facing tax increases and other disincentivisation strategies from the government for years and, whilst they may have escaped a capital gains tax hike, the increase on stamp duty for second homes is a further blow to the profit margins of buy-to-let landlords.
"Few people will argue with the need to generate more income for the public purse but to once again be going after landlords seems short-sighted, not least because it will likely result in more expensive rents for millions of renters already pushed to the limit by the high cost of living.
"While upping rent is one way for landlords to mitigate this most recent tax increase, they can also look at ways of reducing their costs in other areas to cover the losses they are facing.
"We’re seeing the property industry as a whole make good use of technology to drive innovation and reshape the industry while streamlining inefficiencies to reduce costs.
"For example, Inventory Base has helped many estate agents, including National Home Move (NHM), to reduce portfolio costs by up to 30% through proprietary software that streamlines operations and centralises franchise management. Such efficiencies allow agents to pass on savings to landlords which is a significant benefit in an increasingly cost-sensitive market.”
