The government’s decision to launch a consultation into a proposal to add 1% onto the stamp duty paid when buying a home in England and Northern Ireland, payable by those who are not resident in the UK, has been slammed by a leading London-based letting agent.
This comes nearly three years on from the increase in stamp duty for native buy-to-let investors, a move that has deterred many from investing in the sector further reducing the number of available properties while at the same time increasing rents.
Benham and Reeves, one of London’s largest independent letting and sales agents, believes this further restriction imposed on foreign investment will only see the problem worsen.
Benham and Reeves director, Marc von Grundherr, said: “The decision to impose a further penalty on the buy-to-let market via purchases from foreign buyers will send a catastrophic message to this segment of the market at a time when London needs nurturing, not further suffocation.
“When will the government learn that the use of stamp duty as a blunt instrument to gain quick and easy revenue is nothing but counterproductive? We’ve already seen the impact a squeeze on the buy-to-let market can have with the Treasury some £1bn worse off as a result and any similar endeavours will no doubt yield the same results.
“The truth of the matter, as stated by a recent paper by the London School of Economics, is that the vast majority of foreign investment into UK property provides fuel for the rental market. To discourage this will leave yet more hard stretched Londoners scrambling to find suitable accommodation for themselves and their families.”
von Grundherr firmly believes that any further hike in the cost of purchasing property will inevitably lead to further rent increases.
“An attack on those from abroad who wish to show faith in our current market is a foolish endeavour indeed,” he added.