Buy-to-let property investors, who have long been elbowing first-time buyers out of the housing market, have emerged as unexpected beneficiaries of the stamp duty holiday announced this week.
In an attempt to ease affordability for first-time buyers and re-energise the housing market, the government waived the 1 per cent stamp duty for properties under £175,000 for the next year.
Normally, properties sold for over £125,000 would incur the charge.
But mortgage brokers said professional landlords, who are active buyers in the lower end of the market, may be better placed to take advantage of the exemption.
They typically have large cash deposits, so are not so constrained by high mortgage rates.
“While the nil-rate extension may be met with a shrug by some first-time buyers, there may be more enthusiasm shown by landlords looking to add to their portfolio,” said David Hollingworth at London & Country Mortgages.
He believed professional landlords were already on the hunt for bargains. “Shaving the transaction cost will only sharpen their appetite if the right property can be found at the right price,” he added.
The stamp duty holiday was part of a broader package of measures announced by the government to re-energise the housing market. Other moves included a new shared equity scheme and sale and rent-back schemes funded by local councils.
The temporary change to stamp duty allows buyers to save up to £1,750 per property. For first-time buyers, who are having to save larger cash deposits and pay higher mortgage rates, this may not be enough to tempt them into a falling market.
But for buy-to-let investors who think they can find good value in the market, it could be a welcome bonus. Estate agents have already seen property sellers cut asking prices to below £175,000 to entice new buyers.
Peter Rollings, managing director of Marsh & Parsons, a London agent, said vendors selling properties for around £200,000 had almost instantly cut their prices after the measure was announced.
With house prices weakening at a faster pace, landlords may still delay entering the market. “The beauty is that landlords have 12 months to take advantage of this, so they can wait for house prices to fall further before making a move,” said Melanie Bien, director at Savills Private Finance, the mortgage broker.
