Did the stamp duty holiday persuade you to buy? It se...

Relatively few landlords were persuaded to take advantage of the stamp duty holiday according to analysis by the lettings agency Hamptons.

The firm says earlier this year investors purchased 14 per cent of homes sold across Britain - that was in February, the month before the original scheduled end of the stamp duty holiday.

However, over the entire course of the 15-month tax-break investors purchased 12 per cent of homes sold, scarcely up from the average of 11 per cent during the 12 months before the holiday, and far below the 17 per cent recorded in Q4 2015 – the run up to the introduction of the three per cent stamp duty surcharge in April 2016.

Over the course of the 15-month stamp duty holiday, the average buy to let investor’s tax bill fell by just over a third from £8,500 in the month before the holiday, to an average of £5,500 between July 2020 and September 2021.

The average bill came to £5,300 during the first 12 months of the holiday when investors paid the three per cent stamp duty surcharge on the first £500,000 of any purchase.

It then rose 17 per cent to £6,200 when the threshold fell to £250,000 between July and September 2021.

And there is little indication that investors used their savings from the holiday to buy bigger properties in more expensive areas.

Instead, 83 per cent of landlord purchases were under £250,000, meaning their savings from the holiday were significantly smaller than those enjoyed by home movers. It also means that investors have been less sensitive to the change in the nil-rate stamp duty threshold since they tend to buy cheaper properties.

During the holiday the average price paid by a landlord rose by just one per cent to £181,000, despite house price growth of 10 per cent over the same period.

Hamptons says this suggests landlords were happy to pocket the tax saving rather than use it to buy a property which would generate more rent.

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