The hike in stamp duty for landlords renting out their properties could be bad news for the housing market.
George Osborne previously announced that the stamp duty had been raised by three percent on buy-to-lets and second homes. That would mean a property costing £275,000 would be subject to a stamp duty of £12,000.
Landlords will also be limited to the amount of tax relief they can claim.
Immediate Rush on Buy to Let Properties
In the short term, there was a rush on landlords buying a property before the new stamp duty increased and came into effect. However, the long-term forecast is not so predictable.
The hike is likely to be passed on to tenants so rents will rise. It is also feared some landlords may be put off from expanding their portfolio which could lead to a reduction in rental properties.
The move could lead to more people buying their own home and getting on to the property ladder because people would be put off from purchasing buy-to-lets.
It this is the case landlords will want to keep more of a tack of their properties to get a tighter grip on finances. It will be important to make sure their properties are always occupied so they need to keep an eye on the general repair which is a lot easier with a Property Inventory App.
With so many things to think about landlords will probably end up making a list of things to do including contacting an inventory based property inventory software company to help them out with keeping track of all important repairs and property items.
But not everyone wants to own their own home or can afford to. Many workers in London or the commuter belt will still not earn enough to buy property in these areas.
However, it is unlikely that the buy to let market will be wiped out. While some smaller investors or people looking to put their pension money into the property may be put off, the larger landlords or corporate landlords are likely to continue. At the end of the day, the increases in property prices are likely to offset and exceed the increase in stamp duty.
Keeping on Top of Financial Red Tape
Financial advisers will need to keep an eye on the market when advising about buying in this sector, especially with changes to the rules and red tape. Those wanting to spend more time with clients and less time on paperwork may want to invest in some kind of back-office systems for financial advisers.
Specialists can advise on the best types of back-office systems for financial advisers.
Such possible solutions can free up more time for analyzing the impact of financial and taxation changes which will affect their clients.
