The Council of Mortgage Lenders has warned the Treasury of the risk of “overkill” in its attempts to dampen interest in the buy-to-let market.
In response to a Treasury consultation on the proposed 3 per cent stamp duty surcharge on second homes, the CML said the Government ran the risk of stopping the flow of private rented property without any corresponding increase in the ability of households to become home-owners.
The trade body also warned of the fact the surcharge could lead to landlords charging higher rents, thus making it harder for existing tenants trying to save for a deposit.
Paul Smee, director general of the CML, also raised concerns about the fact people may have to pay the added stamp duty on their main property if there is a short overlap between buying their new home and selling their old one, with homeowners then having to claim the money back.
He said: “Our longstanding view is that stamp duty is a blunt policy lever.
“Given the complexity of the proposals, we also suspect that in practical terms the surcharge could cause more problems than it solves.
“We urge the Government at least to move away from a position where people will have to pay and then potentially claim back to one where payment is deferred, and only triggered if the buyer genuinely falls into the intended target category.
“If the surcharge proposal is designed to promote home ownership, there should be better evidence as to why this requires a reversal of growth in the private rented sector.”
Guy Meacock, head of the London office of buying agency Prime Purchase, said: “The stamp duty changes announced in the Autumn Statement will give a bit of a kick to the buy-to-let and second home market in the spring as buyers try to avoid the higher stamp duty from 1 April.”
