The cost of the Government’s incoming 3 per cent surcharge on stamp duty will be passed on to renters, according to Foundation Home Loans.
FHL commercial director Simon Bayley says the charge, designed to slow down buy-to-let activity will have unintended consequences after it comes in on 1 April 2016.
Bayley says: “The extra levy being introduced on stamp duty will in fact just become an unwelcome extra burden for tenants in many cases.
“At a time when more people are finding it difficult to become property owners, there is a sizeable number of people who rely on private rental to have flexibility on location for work opportunities, those with past credit problems or simply because they do not fit the boxes required for social housing. It is they who will be paying as the cost will ultimately filter down to tenants.
“The Chancellor’s move might have seemed like a way of curbing the market as well as adding to the tax take, but bringing in a levy, will really be felt by those who can least afford it. The BTL market remains a valuable contributor of private rental housing and using the levers of taxation in this way is ultimately counter-productive.”