STAY CONNECTED!
    
newsletter-button

TODAY'S OTHER NEWS

UK property sales to fall as tax changes and economic uncertainty deter investors

Fewer people are expected to invest in residential property in 2017, as tax changes and economic uncertainty deter many property investors and would-be owner-occupiers.

The Council of Mortgage Lenders (CML) has downgraded its forecast for 2017, saying it has become ‘more pessimistic’ than a year ago, and now expects the volume of transactions to fall to 1.17m, the lowest level since 2013.

The figure is below the 1.26m it forecast a year ago, which the CML said was ‘partly relating to the economic uncertainty from the EU referendum, but also because of tax and regulatory changes in the housing and mortgage market’.

There has already been a sharp decline in the number of buy-to-let transactions following the government’s outright assault on buy-to-let landlords.

So far this year, buy-to-let landlords have been hit by more stringent mortgage lending conditions, the 3% stamp duty surcharge - or Land and Buildings Transaction Tax in Scotland - that was introduced in April, while the 10% ‘wear and tear’ tax relief for landlords who rent out furnished homes has been abolished, leaving them free to only claim for the amount that they have spent. What’s more, mortgage tax relief is set to be phased out from April 2017.

Paul Smee, director general of the CML, said: “The housing market is relatively well insulated from direct Brexit effects as most activity is driven domestically, but it is not immune from more generalised economic uncertainty.

“And we expect any modest strengthening in homeowner lending to be offset by a less active house purchase market in buy-to-let, as both tax and regulatory changes bite on landlords.”

imgcollapse