More Than 11,000 Properties Flipped To Holiday Homes Amid Staycation Boom

 More than 11,000 second-home owners in England have flipped their properties to become holiday lets since the start of the pandemic, to capitalise on soaring demand for staycations. New analysis of government figures shows that the number of holiday homes trading as businesses has jumped by more than a fifth since the pandemic hit. The data shows that there are now 67,578 homes in England classified as holiday homes which have been flipped to become commercial premises, compared with 56,102 properties in March last year. Read more on the ITV website.

https://www.itv.com/news/2021-09-05/more-than-11000-properties-flipped-to-holiday-homes-amid-staycation-boom

Sunak Prioritised Landlord Tax Break Over Fixing Housing Crisis

Labour has accused Rishi Sunak of announcing a tax break for second homeowners and landlords with his stamp duty cut while failing to announce measures to “tackle runaway house prices and build truly affordable housing”. Following the Budget, the opposition party has highlighted that the continuation of a reduced rate of stamp duty land tax to September will hand half a billion pounds to landlords and holiday lets. 34% of homes bought in 2019/20 were second homes, buy-to-let properties or residential properties bought by companies. Documents from the Treasury show that the reduced rate of stamp duty will cost £1.6bn. Read more on the Labour List website.

https://labourlist.org/2021/03/sunak-prioritised-landlord-tax-break-over-fixing-housing-crisis-says-labour/

Housing Minister Enters Row Over Labour “Bung” Accusation

Housing minister Chris Pincher has entered the row over Labour claiming that the stamp duty holiday announced last week was in reality “a bung” to landlords and the private rental sector. Labour is aggrieved that the stamp duty exemption up to £500,000 applies to all buyers, including those investment purchasers and people wanting a vacation property. The party instead wants buy to let landlords excluded and Thangam Debbonaire, Labour’s shadow housing secretary, says: “It is unacceptable that the Chancellor tried to sneak out this huge bung to second home owners and landlords while millions of people are desperate for support. “ Read more on the Letting Agent Today website.

https://www.lettingagenttoday.co.uk/breaking-news/2020/7/housing-minister-enters-row-about-labours-bung-accusation

Second Homes – Parliamentary Written Answer

Anthony Mangnall: To ask the Secretary of State for Housing, Communities and Local Government, what assessment he has made of the number of second homes that are (a) liable to pay council tax and (b) liable to pay business rates.

Mr Simon Clarke: Second homes are liable for council tax rather than business rates. 253,000 properties were treated as second homes for council tax purposes as at September 2019. 56,000 properties that are available commercially as self-catering holiday accommodation are subject to business rates.

http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2020-04-24/39749

Second Homes – Parliamentary Written Answer

Duncan Baker: To ask the Secretary of State for Housing, Communities and Local Government, what plans he has to bring forward legislative proposals to limit second home ownership.

Christopher Pincher: The Government has introduced a series of measures to help mitigate second home ownership. In 2013 the Government removed the requirement for local authorities to offer a discount on second homes enabling them to charge the full rate of council tax. Additionally, in April 2016, the Government introduced a 3 per cent higher rate of Stamp Duty Land Tax (SDLT) for those purchasing additional properties.

http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2020-03-03/24445

New Stamp Duty Charge Could Free Up Competition For UK Landlords

The property industry will be hoping that housing is a top priority in the upcoming Budget. One housing measure that is expected to get the green light is the move to introduce a 3% stamp duty surcharge on the purchase of homes by non-UK tax residents. The new surcharge is set to sit on top of the existing stamp duty amount for the property and the current 3% levy on the purchase of second homes or buy-to-let properties. This means many overseas investors will be hit with a sizeable tax bill when they buy property in England. Read more on the Property Reporter website.

https://www.propertyreporter.co.uk/hero/new-stamp-duty-charge-could-free-up-competition-for-uk-landlords.html

More Affordable Housing 'Should Be Built In National Parks'

More affordable housing should be built in England’s national parks to help communities excluded by spiralling prices driven by second homes, the new chair for the authorities has said. Carl Lis OBE, chair of National Parks England, has warned that young people and national parks staff are being forced out of some of the most scenic parts of the country by high prices, driven in part by exclusive holiday homes. Lis said the government should also take action on “land banking” by developers in protected areas such as the Lake District, the South Downs and the Peak District. Read more on the Guardian website.

https://www.theguardian.com/environment/2020/jan/29/more-affordable-housing-should-be-built-in-national-parks

Council Tax Rise Targets Second Homes

Owners of second homes in the Yorkshire Dales could see council tax on their properties rise by five times the current level. A proposal approved by the National Park Authority is designed "to help attract and retain families to live and work in the area". Their figures show there are 1,500 second homes there - more than 10% of the housing stock. Any increase in council taxes above 100% would require government approval. Read more on the BBC website.

Stamp Duty Rise Hits Rental Growth

The speed at which rents across the UK are growing has more than halved since an additional 3% stamp duty levy on second homes came into force twelve months ago, according to the latest Landbay Rental Index. That survey, powered by MIAC, revealed annual UK rental growth slowed to 0.90% in March 2017, less than half of the rate of 2.27% seen at the end of March 2016. Outside of London, the pace of growth has slowed by over a quarter since the tax hike, from 2.43% in March 2016, to 1.78% in March 2017. Read more on the CML website.

Boost To Housebuilding In Areas Dominated By Second Homes

The government is to provide £60m to boost affordable housing in council areas most affected by second homeownership. Money will be provided to 148 councils after the CLG announced regional allocations under the Community Housing Fund. The money is intended to provide backing for local housing groups to deliver homes aimed at first-time buyers. One third of the funding – almost £20m – will be allocated directly to local authorities in the south west of England as this is the most popular region for second homes in the country. It accounts for 21% of all second homeownership, according to the government. Read more on the Public Finance website.

Top Architect Blasts 'Free-Riding' Tenants Living In Council Houses In Central London

A top London architect has called for “free-riding” council tenants to be moved out of central London and for affordable housing to be abolished. In a hugely controversial speech Patrik Schumacher, director and principal of Zaha Hadid Architects, also praised London’s foreign second home owners “even if they’re here only for a few weeks” and suggested that “80 per cent of Hyde Park” should be built over.  In his incendiary address to the World Architecture Festival in Berlin he said London’s housing crisis was the result of “intellectually bankrupt” planning departments and said only the free market can provide “housing for everyone.” He said that social housing tenants in gentrifying inner city areas should not expect to be able to carry on living in central London when their council estates are demolished and should be replaced by more “productive” residents - such as his own staff. Read more on the Evening Standard website.

Buy-To-Let And Second Homes Made Up A Quarter Of All Property Sales This Summer

A quarter of properties snapped up by buyers in the summer were either as a buy-to-let or a second home. Despite typical stamp duty costs tripling for second home buyers in April, HMRC data shows that 56,100 of 235,000 property purchases in the third quarter included the additional surcharge. This stamp duty hike clawed in an extra £440million for the taxman in the three month period to September. The statistics show in the three months of April, May and June, 30,300 of 207,900 purchases were for second properties, indicating investors had already rushed to beat the 1 April hike. This data indicates that despite the extra costs and the EU referendum decision, appetite for buy-to-let remains robust. Read more on the Daily Mail website.

Number Of Homes To Rent Decreases

The repercussions of the government’s stamp duty hike on second homes may already be starting to bite. According to research by Property Partner, new rental properties listed by landlords in May were down 5.7% on March levels before the surcharge was introduced. May saw 15.4% drop in new rental property listings compared to April with 91% of towns and cities experiencing fall in supply. New rental properties listed in London dropped by 14.1% last month. After the stampede of landlords putting rental properties on the market in April, last month saw a sizeable, but not altogether surprising, 15.4% drop in new rental listings. Read more on 24dash.

Landlords Are Using Companies To Dodge The Stamp Duty

Buy-to-let mortgage lending is booming ahead of the Chancellor’s tax hike – with a soaring number of landlords reportedly using companies to flout the crackdown. Landlord loans rocketed by 22 per cent in January compared with the same month in 2015, as buyers rush to beat the forthcoming tax changes. From April 1, buyers of second homes will pay 3 per cent additional stamp duty on property purchases. As the proposals stand, individuals who hold more than 15 properties may not have to pay the tax - and companies holding at least that number will be exempt from stamp duty when they buy more. Some specialist landlord firms are now reporting as many as 50 per cent of all sales being made through corporations - a move that could prove to be more beneficial for tax on rental income. Read more on the Daily Mail website.

Buy To Let Boom Doubles Housing Price Growth

Average property prices increased by 0.8% in February – double that of the previous month. The demand from landlords and second-home buyers have contributed to a surge in home sales, which are up 12% month-on-month. London’s house prices have risen £36,903 (6.8%) in the past year, which exceeds the average Londoner’s £35,333 annual salary. Read more on 24dash.

UK House Price Growth Set To Slow

The pace of house price rises will slow when tax changes "take the heat out" of interest from investors, surveyors suggest. The Royal Institution of Chartered Surveyors (Rics) predicted that the UK housing market will slow down over the next three months. In April, landlords and second home owners face a 3% stamp duty surcharge on new purchases. This would slow price rises, Rics said, but only in the short-term. Surveyors still expect house prices to rise by 25% over the next five years. Read more on the RICS website.

EU Referendum 'Likely To Slow Housing Market'

The housing market is likely to be depressed in the run-up to the referendum on the UK’s membership of the EU, according to consultants Hometrack. Hometrack’s index of house prices in 20 UK cities revealed the overall number of sales fell by 2% in the last year. The consultancy warned that uncertainty over the ‘Brexit’ referendum was “likely to slow activity further”, based on analysis of the market during the Scottish referendum. It added that other policies – such as higher stamp duty for investors and second homeowners – was expected to contribute to a slowing market. Read more on the Hometrack website.

Investors 'Rushing To Snap Up Homes Before Buy-To-Let Tax Comes In'

Estate agents are reporting a rush of interest from property investors trying to buy homes ahead of the government’s new stamp duty surcharge on second homes. From 1 April, anyone buying a property for more than £40,000 to let or use as a holiday home will pay stamp duty on the purchase at a rate three percentage points higher than the standard rate. The Royal Institution of Chartered Surveyors (Rics) recently reported that the housing market had seen an “unusually buoyant” December, and suggested that this was in part a result of investors trying to beat the tax change. Those involved in the market suggest that this has continued into 2016. Read more on the Observer website.

Second-Home Buyers Face Stamp Duty Hike Of 500%

One in ten of all UK property purchases will be affected by changes in stamp duty charges from April 1st 2016 according to a consultation paper issued by the government. The consultation paper makes clear that the proposed stamp duty charge is an additional 3% on the whole of the purchase price. So, for example under the current rules, stamp duty on a second property costing £200,000 is £1,500. From 1 April 2016 this will rise to £7,500 – a 500% hike. According to the House Price Index the average price of a UK property in November 2015 was £186,325 and house prices look to be on the increase in many areas.  The draft rules are very tightly drawn so that the additional rate applies if ‘at the end of the day of the transaction’ an individual owns more than one property. Download the consultation from the Gov UK website.

Help To Buy: New Announcements

Key announcements from the Spending Review and Autumn Statement.

1.       Help to Buy Shared Ownership: current restrictions on who can buy a home through shared ownership will be removed from April 2016

2.       London Help to Buy: If you live in London the government will lend you 40% the price of your home from 2016

3.       First-time buyers will be able to get a 20% discount on 200,000 new Starter Homes

4.       Money raised from tax on people buying their second home will be used to help those struggling to buy their first home

5.       Housing Association tenants will be able to buy their homes, with the first sales in 2016

Read all the details on the Gov UK website.