It is expected that the increase of the Stamp Duty charge will push many investors to look towards other different places in the UK rather than the South East and London, as many of the buyers can no longer afford to invest there. This situation is further intensified when combined with today’s higher property prices and lower rental incomes.
The average price of a residence in the North is currently more than £150,000 lower than in the South, which makes experts be of the opinion that the area which has been always prosperous, will be in the spotlight for investors as they could find the North the better option.
In this situation, it is presumed that the North’s natural market structure will become much more attractive for all those investors that have decided to stop investing in the South due to the latest adjustments in the Stamp Duty charge.
Moreover, the North is also set to enjoy more than £7 billion worth of investment in the coming years, as part of the Northern Powerhouse programme. It will provide more power to cities such as Manchester, Leeds and Sheffield.
Therefore, buy-to-let property sales will face a 3% growth in Stamp Duty with the threshold starting with properties valued from £40,000, according to George’s Osborne words.
Buy-to-Let properties will now incur charges of:
• 3% on the first £40,000 to £125,000
• 5% on the next £125,000
• 8% on the next £250,000
The Stamp Duty change won’t take effect until April 2016 and the aim of it is to help first time buyers take their first step onto the property market.
We will have to wait to see investors that are established in the South do when this change comes into force .