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Housing Crisis Worsened by Stamp Duty Changes

The change in stamp duty taxations has inflated the UK’s housing crisis, according to one of the world’s largest property groups.

North East Property Investment

The change in stamp duty taxations has inflated the UK’s housing crisis, according to one of the world’s largest property groups.

The new tiered stamp duty taxation and the additional 3% surcharge for second homes and buy-to-let investments will, according to Christian Ulbrich at Jones Lang LaSalle (JLL), have long-term negative effects on the property market.


While the tiered system has helped to reduce the rate of taxation that has been applied to the majority of homes, Mr Ulbrich also said that the undersupply of homes in the UK, one of the key restricting factors in the property market, is not being addressed through the implementation of this tax.


Furthermore, he stated his belief that the additional 3% surcharge, which came into operation on April 1st 2016, has only slowed down the market.


Designed to target and reduce the level of foreign money investing in the UK property market, whilst increasing access to supply for first-time buyers, JLL’s global chief executive said he understood the aims of the surcharge, but argued that the UK would remain a property haven – even after Brexit.


‘For long-term development, stamp duty is definitely harmful, because the stamp duty in itself doesn’t create any value. It’s an additional cost that makes development more unattractive and it has to be considered in the pricing,’ he said.


Instead of penalising home buyers, JLL’s Global Chief Executive believes that the focus needs to be on building more homes, where demand can be met by supply.


By improving the UK’s infrastructure, with schemes such as the new Crossrail, Mr Ulbrich says it would enlarge the commutable areas where people could buy and still work in key urban centres.


Last week the National Landlords Association (NLA) revealed new figures showing interest from landlords in the northern regions of the UK has doubled in recent months.


The group found that the hunt for higher rental returns, driven in part by lower upfront costs and smaller taxation bills including stamp duty, had seen many investors look to the North.

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