The Autumn Statement announced new changes in stamp duty regulations. From 3rd December 2014 the new stamp duty rates will save 98% of property buyers money.
The new rates will now begin at £125,000 at 2% and increase at each level until the price reaches £1.5m and a rate of 12%, for each level’s figures see the gov.co.uk website.
The National Landlords Association has said that the reduction in stamp duty is a big win for the property market especially in terms of buy-to-let investment. A spokesperson from the NLA commented, “The introduction of a straightforward marginal system of taxation will mean private landlords will now not only face lower costs when acquiring property, but also have funds to implement property improvements and keep rents down.”
As landlords typically buy lower priced properties to obtain a higher rental yield they are one of the groups which see the most positive impacts of the new changes. It has been estimated that the new rates will save landlords £50 million a year.
In terms of regions, London will see the most negative impact of the stamp duty changes; higher property prices mean higher stamp duty costs. Therefore in expensive regions such as London and the South East stamp duty could reach levels of 12%, forcing property investors to look elsewhere for their buy-to-let investments.
Regions such as the North West are proving popular with investors. Here the average house price is £163, 651 which falls into the 2% stamp duty range – a stark contrast to the expensive prices of London.
Northern regions in the UK are already becoming increasingly popular with buy-to-let investors due to their average rental yields of 7.1%. These new changes should see the area continue to become one of the most popular areas of the UK for property investment.
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