Residential Property Review of 2016
As we say goodbye to 2016 we sit back and reflect on the changes we feel have had an impact to the sales and lettings industry, one of the largest being the change in stamp duty for second home buyers.
Although at first glance some of our buyers have assumed this change would not affect them as they were buying the property for personal use and not rental, it is not just landlords that have been hit but anyone owning a second home.
This could be parents buying a property for their children or a couple purchasing a home together where one is already a homeowner. Like many of our clients, homeowners who want to buy another home before selling their current one will still be affected by the increased stamp duty, but you can apply to reclaim the additional tax if the previous residence is sold within 36 months.
The higher rates are now 3% above the current residential rates, including the 0% band. For example, anyone buying a £200,000 second home or buy to let property now pays stamp duty of £7,500. This is based on paying 3% for the first £125,000 and 5% instead of 2% on the amount between £125,001 and £250,000. This gives them a total bill of £7,500. This is £6,000 more tax payable than under the previous regime.
Also affecting the ‘pocket’ of the general public is the more recent autumn statement, which announced a potential ban on the fees tenants pay to rent a property, although no date or definitive changes have been confirmed as yet. This change would be good news for a tenant in the short term, but these checks still have to be undertaken in order to protect the property owner, costs which will ultimately have to be met by the landlord. This will undoubtedly have a knock on effect on rents making renting a property increasingly out of reach for people starting up a home.
On a positive note, throughout the year we have seen activity increasing significantly across several of our offices demand has far outweighed supply and we are confident we will see this trend continuing into the new year.
May we take this opportunity to wish you all a very Happy Christmas and Prosperous New Year from the team at George F. White.
If you wish to discuss either your sale or lettings queries with us please telephone your nearest office:
Gemma Miller – Alnwick, Northumberland – 01665 603581
Lindsay French – Wolsingham, County Durham – 01388 529579
Victoria Linsley – Barnard Castle, County Durham – 01833 690390
Sheryl Sowden – Bedale, North Yorkshire – 01677 425301