Ipersonally find buy-to-let a difficult subject to discuss, but it is a very important part of the overall housing debate. One could argue that the buy-to-let frenzy is one of the main reasons why the housing market is so over inflated. The more people that buy properties with the intention of letting them out reduces the number of homes available for those who want to be owner occupiers. The demand for home ownership properties soars while the number of available properties, because of the buy-to-let, is reduced, therefore house prices go up. The irony is that the more house prices increase, the more rental prices go up and the more attractive buy-to-let properties become as investments so people keep buying. It is a vicious cycle that continues to fuel the market.
Now, I’m not knocking those people who want to invest in property. Far from it. With property prices rising at an alarming rate and savings accounts paying peanuts, who wouldn’t be tempted to invest in the buy-to-let game? I know so many families, with young kids, who are investing in buy-to-let properties now so that their children have access to a decent home when they are older. All parents (and I’m one of them) realise that they are going to have to provide significant financial support for their kids to have any chance of owning their own home, so you are better to invest in a buy-to-let property now rather than having to buy your kids a home in 18 years time when house prices may have quadrupled. So, I get it. But, with the boom in buy-to-let properties pushing house prices through the roof the government have announced some big changes in an attempt to cool the market.
In the 2015 Summer Budget and Autumn Statement, the Chancellor introduced some changes that will affect anyone buying or owning a buy-to-let property in the UK. The first change is that from 1st April 2016 higher rates of stamp duty will be charged on the purchase of additional UK residential properties. This will be increased by 3% above the current stamp duty rates.