The 3% stamp duty surcharge being introduced by the chancellor on new buy-to-let purchases will just filter down in the form of increased rental charges, Foundation Home Loans (FHL) has argued.
Simon Bayley, commercial director at the Bracknell based buy-to-let lender, argues that the move to try to put a brake on buy-to-let activity will have an effect that George Osborne probably had not considered.
He said: “The extra levy being introduced on Stamp Duty will in fact just become an unwelcome extra burden for tenants in many cases. At a time when more people are finding it difficult to become property owners, there is a sizeable number of people who rely on private rental to have flexibility on location for work opportunities, those with past credit problems or simply because they do not fit the boxes required for social housing. It is they who will be paying as the cost will ultimately filter down to tenants.
“The chancellor’s move might have seemed like a way of curbing the market as well as adding to the tax take, but bringing in a levy, will really be felt by those who can least afford it.
“The buy-to-let market remains a valuable contributor of private rental housing and using the levers of taxation in this way is ultimately counter productive.”