English landlords have faced an overnight stamp duty bill increase averaging more than £6,000 following the Autumn Budget, analysis from Inventory Base has found.
The analysis pointed out that, during last week’s Autumn Budget, chancellor Rachel Reeves revealed the rate of stamp duty paid on second homes in England was to increase from 3 per cent to 5 per cent, and that this change would be implemented from October 31.
Based on England’s current average house price of £309,572, second-home buyers were, before the new rate was enforced, facing an average stamp duty tax bill of £12,266.
However, the new 5 per cent additional rate means that this tax bill now sits at £18,457, an instant increase of £6,191.
Inventory Base operations director, Sian Hemming-Metcalfe, said: “England’s landlords have been facing tax increases and other disincentivisation strategies from the government for years.
“While they may have escaped a capital gains tax hike, the increase on stamp duty for second homes is a further blow to the profit margins of buy-to-let landlords.
“Few people will argue with the need to generate more income for the public purse but to once again be going after landlords seems short sighted, not least because it will likely result in more expensive rents for millions of renters.
“While upping rent is one way for landlords to mitigate this most recent tax increase, they can also look at ways of reducing their costs in other areas to cover the losses they are facing.
“We’re seeing the property industry as a whole make good use of technology to drive innovation and reshape the industry while streamlining inefficiencies to reduce costs.
“For example, Inventory Base has helped many estate agents, including National Home Move, to reduce portfolio costs by up to 30 per cent through proprietary software that streamlines operations and centralises franchise management.
“Such efficiencies allow agents to pass on savings to landlords which is a significant benefit in an increasingly cost-sensitive market.”
The analysis also found there are four regions of England where, due to relatively high house prices, the average second-home buyer has been hit with an even steeper duty increase.
In London, for example, where the average house price is £531,212, second-home buyers have seen their stamp duty bill grow by £10,624 to sit at £40,621.
Meanwhile, in the South East, an increase of £7,696 puts the average stamp duty bill at £25,980, while the East of England and South West have seen increases of £6,884 and £6,415 respectively.
tom.dunstan@ft.com
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