New research has revealed the financial impact on landlords of the 3% stamp duty rise set to come into force on 1 April.
According to Lendinvest, landlords in 13% of the country are set to pay stamp duty for the first time, with Darlington, Halifax and Doncaster among the worst affected areas.
Average house prices in 14 out of 105 postcode areas are below £125,000, meaning future buy-to-let purchases will be subject to up to £3,750 stamp duty for first time.
The findings revealed that 86% of first-time stamp duty payers are in the Northeast or Northwest, while landlords in Inner London and Harrow will need the equivalent of 20 months’ rent to pay for the rise.
Landlords in areas including Sunderland, Blackburn, Durham, Hull and Wigan could have to pay up to £3,750 on new purchases on which they paid nothing previously.
Landlords in Tunbridge Wells, Dartford, Romford will see a stamp duty rise of more than 300%, compared to 200% in Inner London.
Christian Faes, co-founder and CEO of LendInvest, said: “The stamp duty hike spells bad news for landlords – and their tenants. Put simply: when taxes rise, someone has to pay. Our latest BTL Index shows that the likely payer is ultimately going to be the tenant, with higher rents. The Stamp Duty Land Tax hike will cause rental yields to fall for landlords, putting pressure on them to raise the rents they charge.
“It’s not just in Inner London, where landlords’ taxes will soar, that we can expect to see landlords and tenants squeezed financially. The Index shows that all across England and Wales, we will many landlords factoring several thousands of pounds of stamp duty tax into their budgets for the first time. Towns like Sunderland, Blackburn, Wigan and Oldham could be particularly badly impacted: here, rental yields are comparatively good but average house prices are below £125,000 meaning stamp duty will be imposed for the first time.
“The Treasury’s decision to inflict this tax hike is part of their longer term plan to professionalise the buy-to-let market and make Britain a country of homeowners. While the mission has its merits, there are no quick fixes to the nationwide housing crisis. Until there are more houses on the streets that people can buy at reasonable prices, landlords have their place and their tenants must be protected.”
