Buy-to-let lenders are currently reviewing the detail around the changes to stamp duty rates to assess the implications of the increased charges on their business.
In the Autumn Statement, chancellor George Osborne revealed a plan to increase the stamp duty premium on buy-to-let properties and second homes by 3 per cent from April next year.
Mortgage lenders, including HSBC and Lloyds, have now told FTAdviser they are currently considering the detail of the initiative in order to review their criteria for lending.
“We are assessing the implications of the announcement made during the chancellor’s Autumn Statement,” a spokesman for Lloyds Banking Group said.
“We review our policies and criteria constantly, but it is too early to give an indication of what or when we might make any changes in relation to this.”
John Heron, director of mortgages at the Paragon Group, said: “What we don’t know yet is the outcome of the consultation that the chancellor has promised and how that might impact professional landlords.
“It is simply too early to tell the outcome, and there is precious little detail in what we saw (in the Autumn Statement).”
Many industry figures have suggested there could be an influx in buy-to-let and second home purchases before the new charges come into force in April.
However Mr Heron disputed this claim.
He said: “Certainly you would expect landlords who are already at some stage in purchasing a property to accelerate the process so the purchase is as tax efficient as it can be.
“But I doubt whether we will see a wholesale rush because in our experience landlords weigh these matters up very carefully and take their time over decision making. So I don’t think they will rush into investment simply because of the change.
“I think a measured acceleration of existing transactions is the most likely outcome.”
In July, changes announced in the Summer Budget forced lenders to reassess their affordability calculation for buy-to-let mortgages.
Mr Heron argued the change in the Autumn Statement will not affect the affordability criteria of the mortgage but rather the cost of purchasing, and therefore doubted whether there was a need to adjust affordability calculations in light of the changes in the Autumn Statement.
A spokeswoman from Nationwide said the chancellor is clearly moving towards a shift in focus towards home ownership in the UK.
“The latest reform of introducing higher rates of stamp duty on additional residential properties, including buy-to-let, builds towards that aim,” she said.
“We will look to work with the government on the proposals and await further details beyond the headline announcement.”
Walker Crips’ wealth management director, David Hetherton, said he thinks the chancellor’s announcements around buy-to-let investments will have a positive impact on the wealth management industry.
He said: “The Autumn Statement will encourage investors to think twice about concentrating their funds in buy-to-let property portfolios,” he said.
“Those consumers with geared property portfolios may begin exploring investment opportunities which provide potentially better value, such as advisory or discretionary managed portfolios.”
katherine.denham@ft.com
