Autumn Statement in UK. Further Attacks on Buy To Let Sector

No roll back of the 3% stamp duty on second properties. No mention of the section 24 tax changes. The tax changes is a game changer.

Impact on landlords: Negative
Many buy-to-let landlords will either:

1. older ones to give up investing altogether. Sell up. Increase in supply.
2. Determined and more sophisticated ones will transfer portfolio to SPVs.
3. Novice ones will cap their investments at 3 - 4. They won't expand. Demand remains constant.

Prices of expensive London projects are likely to fall further. Those properties with lower yields in London will also fall in price. The ones with higher yields investors are likely to retain, especially in Birmingham, Manchester and elsewhere north of England.

Impact on First Time Home Buyers: Postitive
If prices fall in London by 10 - 20% in Zones 2 - 4, first time home buyers may feel it is finally within their reach. Home ownership will increase.

North of London, first time home buyers will be the happiest. The houses are cheap to begin with. So a slight fall or even an increase will not matter. They will buy.

But many who cannot yet conjure up a deposit will still be sidelined.

Impact on Renters: Mixed

for renters who have no intention to buy, e.g. migrants, expats, students, retirees who wish to travel the world, there will be fewer properties for rent. They may find their choices narrowed. But this may be compensated by steady rents as first time home buyers who are forced to rent, to step on the ladder.

For renters with intention to buy, they will chance upon the steadying of prices to jump on the ladder.

Impact on developers: positive
Developers are so-called the modern day heroes. they provide housing to the masses. Especially developers of affordable housing catering to first time home buyers. It will be a bonanza.


The overall impact is net negative for landlords as price appreciation slows down, tax liabilities rise. Rents will also not decrease much because some renters will hope on the property ladder. It might be better to be a developer in the UK now for mass housing, if you are able to secure cheap brownfield sites near infrastructure spending.



http://www.ipglobal-ltd.com/en/articles/market/uk-autumn-statement-what-you-need-know/?utm_source=eDM&utm_content=Autumn%20statement