The Autumn statement: Buy-to-let must adapt to survive
Our vision at Property Partner is to bring innovation to an outdated and inaccessible industry. We want to make the buy-to-let market better for investors, better for tenants, and also better for small developers – helping to ease the UK’s severe housing shortage. We’re delighted to see that this vision is shared by the government. Wednesday’s Autumn Statement included some welcome steps to get the supply side moving and help first time buyers: an increase in the housing budget, a boost for shared ownership, and crucially for those struggling in the capital, a London Help to Buy programme.
What does it mean for you as a property investor?
Hot on the heels of the changes to mortgage interest relief announced in the Summer budget, George Osborne has now unveiled a 3 percentage point increase in stamp duty for those buying buy-to-let properties. This change will affect purchases made after April 2016.
Property Partner, and our investors, won’t be impacted by the stamp duty hike – because corporate investors are excluded. As the consultation on this moves forward though, we will be working with the Treasury to ensure that Property Partner, and our investors, remain exempt.
Why won’t this tax increase apply to us?
Simply because our goals, and the ways we operate, are aligned with the government’s own ambitions. As George Osborne said yesterday:
“The higher rates will not apply to….corporates or funds making significant investments in residential property given the role of this investment in supporting the government’s housing agenda. The government will consult on the policy detail, including on whether an exemption for corporates and funds owning more than 15 residential properties is appropriate.”
The government seems to be expressing a desire to imitate the German rental market, which is largely institutionalised and avoids the problems faced by the UK.
While there are many fair and efficient landlords, a minority of rogue landlords have given the whole industry a bad name, offering poor quality housing at extortionate rents. By professionalising buy-to-let, we can offer fairer rents and provide a better all-round service for tenants.
And what of the future?
From the outset, our vision was to bring an antiquated industry into the modern age. The new measures just announced in the Autumn Statement prove that these changes are not only long overdue – but are now vital. Buy-to-let must adapt to survive, and now, we’ve found a way to do this that benefits everyone. By using the power of the crowd, we can help solve the problems in the housing market – together.