Landlords benefit from Budget changes to Stamp Duty
Property owners with landlord insurance should be pleased with the recent Budget.
That is the verdict of Graham Kinnear, MD of tenant referencing and eviction service Landlord Assist, who said that the investment sales market could now be of interest to institutional purchasers.
Landlord Assist believes that changes to the Finance Bill due later this year will potentially kick start the residential sales market for big investors.
Kinnear said: “The changes mean that the rate of stamp duty payable on a purchase will relate to the mean value of the dwellings purchased rather than by their total value.”
Previously the costs associated with purchasing portfolios of properties have meant that many of the institutional investors have shied away.
Consider a portfolio of residential property being sold at £10million with the average price of the individual properties at less than £175,000.
The current stamp duty payable would be £500,000 yet under the new proposals the stamp duty bill would be £100,000 giving a saving of £400,000.
Stephen Parry, Commercial Director at Landlord Assist, said: “This longed-for move should see the institutions, pension funds and the like, starting to really consider residential property as an investment medium.”
It is good news for landlords wishing to increase the size of their portfolios which is of particular importance at the moment given the seemingly insatiable demand for accommodation and the fact that the supply of new homes is currently at its lowest level during peacetime since 1923.
Whether landlords are buying more property or keeping to their current level, they should always ensure that they protect their stock with buildings insurance for landlords.
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