Most landlords unfazed by stamp duty surcharge

Four in five (78%) would-be landlords will still consider investing in property after the new stamp duty rules are introduced from 1 April, Nottingham Building Society research shows.

The 3% stamp duty surcharge will put off one in seven (14%) landlord purchases.

Ian Gibbons, senior mortgage broking manager at Nottingham Mortgage Services (part of The Nottingham), said: “The buy-to-let market remains strong despite a period of uncertainty as lenders and customers assess their options ahead of stamp duty and tax changes.

“People should only invest in buy-to-let if they can afford to and it makes financial sense for them. But that said it is clear that demand for property investment is not going away any time soon with the research showing people still very much value property as part of retirement planning.

“The tax and stamp duty changes are complicating the calculations on buy-to-let but given the risks of stock market investment and the low interest rates there is a strong case.”

LaterKay Ingram, director of savings and investments at financial adviser LEBC, agreed that buy-to-let will still be attractive for some despite the government's clampdown.

He said: “While these changes may make buy to let a less attractive option in the future, there will still be some would be landlords who will still wish to include this asset in their portfolio as part of a diverse range of investments or with a view to passing on properties to their offspring in due course.

“In addition many existing landlords with fixed rate loans will need to review their mortgage options when they mature or may need to restructure their portfolio of properties and borrowing. Stricter lending criteria may mean that getting new mortgage finance may not be as easy as it was when the original loan was taken out.

"The removal of a standard 10% wear and tear tax allowance and to only get tax relief at basic rate on interest payments will clearly impinge on the affordability criteria.”