The stamp duty surcharge paid by second homeowners and landlords has been increased from 3 to 5% in the Autumn Budget.
The change, which takes effect from tomorrow, will make it costlier for investors to purchase new buy-to-let properties.
It’s thought the change could contribute to dwindling rental stock.
Rob Houghton, chief executive of reallymoving, said: “Landlords are already leaving the sector in droves, and a further increase in the stamp duty surcharge will be yet another deterrent for anyone thinking of investing in property
“It worries me that these rental homes will not be replaced, creating more competition among tenants and pushing rents even higher.”
Sam Lindsay, mortgage and protection adviser of My Mortgage Angel, seemed worried about the change.
She said: “Hopefully [it] won’t affect the sale of buy-to-let properties as much as we initially expected.
“We need buy-to-let landlords to bring much needed choice back to the rental market. Without it, renters will really struggle, and rents will continue to rise.”
Robert Poole, director at Glide Property Management, part of Leaders Romans Group, said: “The change to stamp duty for second homes means that landlords are less likely to invest in flats as a buy-to-let option. “
The government will also allow stamp duty levels to revert back to their previous levels in April 2025.
That will move the minimum threshold for paying the tax from £250,000 to £125,000; and from £425,000 to £300,000 for first-time buyers.
Guy Gittins, chief executive of Foxtons, said: “Homebuyers will be understandably disappointed, but not surprised, about the lack of a stamp duty relief extension, with the current thresholds set to revert back as of March next year.
“However, as they have already factored this into their purchase plans we do not expect it to impact the strong demand we’re currently seeing in the market.”
