View more on these topics

Lenders urge Govt to rethink buy-to-let stamp duty hike


Lenders have united to slam the Treasury’s planned 3 per cent surcharge on stamp duty land tax for second properties as rushed and flawed.

The Government wants £60m of the tax to help communities in England where the impact of second homes is a problem and will use some of the cash to build affordable housing.

The Council of Mortgage Lenders and the Intermediary Mortgage Lenders Association are urging the Government to rethink the higher tax rate, saying that the plans would backfire on the housing market as a whole.

The CML says there “is a risk of overkill in dampening investor sentiment to the extent that the flow of available private rented property could be disrupted” and that the number of homeowners would not necessarily increase.

It also suggests landlords could put up rents because of the proposals.

CML director general Paul Smee says: “Our longstanding view is that stamp duty is a blunt policy lever. Given the complexity of the proposals, we also suspect that in practical terms the surcharge could cause more problems than it solves.

“We urge the government at least to move away from a position where people will have to pay and then potentially claim back to one where payment is deferred, and only triggered if the buyer genuinely falls into the intended target category.

If the surcharge proposal is designed to promote home ownership, we think that there should be better evidence as to why this requires a reversal of growth in the private rented sector.”

Intermediary Mortgage Lenders’ Association executive director Peter Williams says the proposal is a “poorly-constructed intervention in the housing market”.

Williams slammed the short time given to respond to the consultation, which opened on 28 December and closed on 1 February.

He says: “They have no view about how this tax will impact on the market as a whole, let alone the buy-to-let market.”

Williams says that affordable housing should be funded by general taxation and not hypothecation.

He says: “What this comes down to is a small additional charge on transactions, which will eventually be swallowed, but it puts extra pressure on rents. It doesn’t seem at all sensible.”

The proposed tax surcharge would apply from 1 April 2016.

The proposed tax rise is one part of the Government’s Five Point Plan to help low-cost home ownership for first-time buyers announced in its Spending Review and Autumn Statement 2015.

Other points of the plan are to build 400,000 affordable homes by 2021, to extend the Right to Buy to housing association tenants, to speed up housebuilding and to introduce London Help to Buy.



Robert Sinclair: Double trouble for the buy-to-let market

The Government has turned decisively against the private landlord in favour of the first-time buyer. While the various purchase assistance schemes that speckled the last government, culminating in two flavours of Help to Buy, provided welcome support to get people on the housing ladder, it has clearly not been enough. Indeed, it seems a long-term […]


PRA to review underwriting standards of buy-to-let lenders

The Prudential Regulation Authority has revealed it intends to review the underwriting standards of buy-to-let lenders. The announcement was made yesterday in the most recent Financial Stability Report and comes at a time when there is intense scrutiny of the buy-to-let sector. Not only has Chancellor George Osborne announced a gradual cutting of tax relief […]


Govt to impose higher stamp duty on buy-to-let

Chancellor George Osborne has announced a raft of measures to help people onto the housing ladder, including increased stamp duty rates for buy-to-let properties. Giving his Autumn Statement today, the Chancellor said he will introduce a new rate of stamp duty which is 3 per cent higher than a residential property of the same price […]


FPC: ‘No immediate cause for action in buy-to-let market’

The Financial Policy Committee says there is “no immediate cause” to take action in the buy-to-let market. However, the Bank of England committee says it is “alert” to the sector’s rapid growth and “potential developments in underwriting standards”. Minutes from the FPC’s meeting this month say: “The FPC judges that there is, at present, no […]

Certification guide

Guide: how to… certify your pension scheme

Certification is highly complex and surrounded by a minefield of information and auto-enrolment jargon, which can make it very difficult to understand. However, for many employers it is a necessary process that must be executed successfully.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm