Buy-to-let investment has halved in the first 12 months since the additional Stamp Duty surcharge was introduced, but it’s not career landlords being affected, My Home Move has claimed.
The Government introduced the surcharge on April 1 with the intent of limiting landlord purchases in favour of first-time buyers.
But data based on the surveyor’s own completions suggests that rather than harming career landlords, the changes have hit those who would typically be purchasing a holiday home or somewhere for their retirement.
This assumption is made because the number of gifted deposits used have increased concurrently, suggesting parents who historically may be planning to buy a second home for themselves, are just digging into their savings and giving their children the cash instead.
The surveyor recorded 1,634 completions between April 2016 and February 2017.
In comparison, there were 3,207 between April 2015 and February 2016.
Meanwhile, in the months leading up to the Stamp Duty changes, gifted deposits accounted for around 8.4% of all purchase transactions among the surveyor’s completions.
Once the law changed, the data showed an increase of gifted deposits to around 9.3%.
The surveyor’s own customer data showed the proportion of gifted deposits specifically to “second steppers” and “middle movers” also increased from 80.6% in March to 88.5% by the end of December 2016.
Doug Crawford, chief executive of of My Home Move, said: “Even though a year has passed, the introduction of the Stamp Duty levy still remains controversial.
“On the face of it, the changes to Stamp Duty were presented by the Government as a tax that would affect ‘greedy’ landlords – those who were snapping up properties away from first-time buyers.
“However, in reality, people who buy additional homes aren’t just landlords with vast portfolios of properties, but parents looking to help their children while at university, or retirees wanting to buy themselves a holiday home.”
He said the Government’s tax play has affected individuals looking for a second property far more than the career landlord.
Crawford added: “If anything, the changes have resulted in money being redirected into gifted deposits, particularly for second steppers and middle movers.
“As such I suspect it’s the parents, those who ordinarily would have bought a second home, who have redirected their savings towards their children to help them on to, and up, the property ladder.”