A lettings agent says the stamp duty hike announced in the Budget shouldn’t deter buy to let investors – who can in any case offset the cost against tax.

Steven Bond, lettings managing director at the Beresfords Group, says: “From an existing landlords’ perspective there were no real changes within the budget that will have a detrimental effect financially on the current properties which they may own. 

“Anyone currently purchasing a second home for investment purposes will now pay an extra 2% on the lowest threshold being £0 to £250,000. So, an increase from 3% to 5% would, in monetary terms, represent an additional £5,000 for a purchaser buying at £250,000 or above – slightly less for any such properties under £250,000. 

“…It will clearly hit those currently purchasing for this purpose or anyone looking to do so in the future. In these instances, it’s important that any additional charges in this regard should be factored into related financial forecasts.

“Granted this additional cost will not be welcomed by those affected, but it should be remembered that as and when such properties are sold at some point in the future, the current regulations allow landlords to offset such costs along with other specific expenditure, against any profits made before CGT is finally applied. 

“So, in essence, there is a clear opportunity to reclaim some of these charges back from HMRC. Furthermore, bricks & mortar has and continues to offer lucrative financial returns to those prepared to invest over the medium to longer term, as average property prices and levels of rent received continue to increase. Therefore, the recent change to the entry level threshold of Stamp Duty for those buying is unlikely to be a significant deterrent for the large majority of investors who remain attracted by the healthy rental returns and capital growth potential on offer.”

He says the rental sector is in any case relieved that Rachel Reeves’ Budget did not include any increase to Capital Gains Tax for buy to let investors.