The consequences of the additional stamp duty for buy-to-let properties

Fewer people are going to buy properties to let them out

Ok, that is not rocket science. Every action has a consequence. If it costs more to buy a buy-to-let property and it costs more to run one (i.e. you lose out on tax deductions for mortgage payments) then… fewer people are going to do it. Also, some existing landlords may want to get out of the market.

The consequence of this is fewer buyers which should mean lower prices or at least slowing of price rises. The prices won’t come down though because there is a huge backlog of buyers just waiting to jump into the market if it becomes more affordable.

Rents are going to rise

The downside of this for renters. With fewer properties being let, rents can only go up. Not great in London where rents are already high.

The government seems to want everyone to be able to own their own home (kind of a British tradition) but we are not sure this is the right approach. What most people really want is a sustainable life. They just thinking owning a home is the way to get there. They might be wrong. If a mortgage cripples you and means you can’t live a normal life then is it worth it? Some might argue they would rather have affordable rents that give them some disposable income for savings, holidays and some investments.

Which would you prefer? Own you own house but be cash poor until you sell your house in your mid 60’s and 70’s and hope you can enjoy the cash then or be young with some cash in your pocket and the world at your feet?

Let us know in the comments.

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