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Home News Company News George Osborne declares war on buy-to-let landlords

George Osborne declares war on buy-to-let landlords

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When George Osborne announced a couple of years ago that he was closing the loophole that allowed overseas owners of UK properties to avoid capital gains taxes, the move was applauded even within the property industry. When he announced increased stamp duty for those buying through companies, as many overseas buyers, do, the move was met with unease. However, the recent move to impose a punitive level of additionalstamp duty on both British residents and non-resident overseasinvestors of buy-to-let property has sent shockwaves throughout the industry.

Although it is widely assumed that overseas buyers have snapped up most of the homes in central London, reports from leading estate agents stating that up to 75% of buyers in prime areas are overseas buyers are misleading.

Industry analysts suspect the true number of overseas buyers who have purchased in recent years is closer to 20%. Anecdotal evidence suggests that in the wake of falling returns, the current number of overseas buyers is even smaller than this, making up less than 10% of buyers.

Benham & Reeves Lettings would also ask Mr Osborne to spare a thought for investors who have reserved new build properties several months ago but will now face a unexpected additional cost amounting to thousands of pounds once the properties are completed.

Of greater concern to the lettings industry is that the Chancellor is actively targeting buy-to-let landlords. While overseas buyers may not attract that much sympathy from the British public, buy-to-let landlords are crucial to the health of the property market and economy as a whole. Few firms offer final salary pensions and the returns on private pensions are often far below the expectations of retirees. For years, buy-to-let has been touted as an alternative to pensions. Today’s move will force many to leave the sector altogether, increasing their dependence on the state and diminishing the overall number of properties available to tenants. This, in turn, will invariably lead to increased rents and falling property standards.

Marc von Grundherr of Benham & Reeves Residential Lettings comments, “The Chancellor has unilaterally decided that buy-to-let landlords are responsible for pushing house prices beyond the reach of first time buyers. This is ridiculous. A lack of homebuilding has pushed up prices and we also have to look at first time buyers themselves. We’re also seeing a shift in expectations from the Millennial Generation. They’re less willing to go into un-gentrified areas, renovate properties themselves or even save for years for a deposit. I couldn’t afford to buy in Chelsea as a first time buyer, either. Don’t blame buy-to-let landlords who are simply trying to supplement their derisory pensions.”

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About the Author

Established in 1958, Benham and Reeves is one of London’s oldest, independently owned property lettings and sales agents.  With specialism in residential sales, corporate lettings and property management in prime areas of London, the company operates from 21 prominently located branches and 14 international offices.

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