Concerns that SDLT surcharge is weighing heavily on demand

Former Chancellor George Osborne’s introduction of a three per cent Stamp Duty Land Tax (SDLT) surcharge payable upon purchase of additional residential properties has hit demand for homes, according to housebuilder Berkeley Group.

Berkeley Group has branded Osborne’s much-criticised move an “extraordinary attack on buy-to-let landlords” and suggested that the surcharge is responsible for a fall in new-build property reservations.

According to the group’s own data, reservations for new-build properties fell by 20 per cent in the six months to 31 October.

“This fall in volume is due to higher SDLT, the extraordinary attack on buy to let landlords – such an important part of sustaining the London market and increasing the supply of new homes – and the uncertainty caused by Brexit,” said Berkeley Group chief executive Rob Perrins.

His comments echo concerns that SDLT reforms coupled with Britain’s vote to leave the European Union (EU) have dealt a blow to the UK’s property market.

Estate agent Knight Frank has suggested that economic uncertainty in future months is likely to lead to weaker house price growth in 2017, while property body Hometrack predicts that transaction numbers will fall by more than 8 per cent in the wake of Brexit negotiations.

Despite these comments, figures from the Bank of England suggest that the property market has recovered from a ‘post-Referendum slump’ in recent months – with mortgage approvals reaching their highest peak since the so-called ‘buy-to-let rush’ in March.

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