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SDLT rises cool Buy to Let market, but First Timers take slack!
- AuthorRichard Carter
Government increases in Stamp Duty have cooled the Buy-to-Let market, but First Time Buyers take up the slack! An industry leading report from the Council of Mortgage Lenders was today analysed by Richard Carter, a Property Partner at Martin Tolhurst Solicitors
“12 months ago the Government intervened in the Housing Market by increasing Stamp Duty by 3% for investment buyers. This was a deliberate Government policy to try and cool the buy to let market and the first 12 months of data shows it had the desired effect for the Government. The number of Buy-to-Let mortgages granted over the past year has halved with just 71,000 loans approved by Lenders. However we expected a slowdown as before the deadline there were very high numbers of buyers buying property to beat the tax increase. The good news is that with less competition from investment buyers the numbers of first time buyers have increased well and we believe these trends are likely to increase. Mortgage companies have some very competitive deals to attract First time buyers provided they have a good deposit to put down. We continue to see the Bank of Mum and Dad, or even the Bank of Grandpa and Grandma helping out with these deposits to enable their children or grandchildren to get on to the Housing ladder."
"We anticipate the Buy-to-Let housing market to recover gradually over the coming months. Investment returns on bank savings remain low and housing still represents an opportunity for those with investment monies to make a reasonable return. We hope the newly elected Government will tweak the changes made 12 months ago as there have been some unintended consequences of the 3% stamp duty land tax hike. The Government intended to cool the Buy-to-Let market with the 3% increase but we have found other buyers, who are buying homes for their own use as homes caught by the 3% surcharge. This especially includes buyers who have moved out of the former matrimonial home into a new property or someone who already owns a property with other family members. Some reform of the rules to stop penalising genuine buyers being caught by the 3% tax would be welcome.”