The increase in Stamp duty is of grave concern to investors

The British press, which covers the real estate market never stops to discuss the forthcoming introduction of higher Stamp duty for investors.

The head of the National Landlords Association, Richard Lambert said that the confidence of homeowners in connection with the adoption of this law has collapsed to the minimum value for all the time and is now at its lowest level since the financial crisis.

At the meeting with the Builders Association of the UK, Richard Lambert said that the situation is alarming, as business investors ‘ confidence is now at 43%, which is 5% lower than during the financial crisis.

According to the budget, which was announced by the Chancellor last summer, the UK needs about 1 million new housing units in the private rental sector over the next five years. However, the proportion of homeowners who wish to sell their property in the next 12 months increased from July 2015 with 7% to 19% after the introduction of new rules, that is, homeowners can sell about 500,000 units in the first year. Over the next five years, 28% of homeowners do not plan to buy more housing, 10% intend to reduce their portfolios, and 5% are willing to sell all their property.

However, the intentions of the government are not taken into account the fact that among the 500,000 housing units is unlikely to be a lot of liquid apartments and houses with one and two bedrooms, which are vital to the real estate market for those buyers who first buy a house. This will most likely be illiquid and remote road junctions of the estate, with poor capacity to purchase.

According to Lambert, a large part of professional investors will leave the market because of large Stamp duty and will withdraw capital from the country, which is certainly not the best way impact on the investment climate of the United Kingdom.

Well, the tenants will suffer from hiked price tag of rent and the lack of the ability ever to become owners.

® Alice Morgan. 26.01.2016 G.

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