Posts with tag: HMRC

Tax changes taking their toll on buy-to-let, as smaller landlords driven out

Published On: February 11, 2020 at 9:15 am


Categories: Landlord News

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New figures highlight that smaller landlords are still being driven out of the market by cuts to tax relief and other rule changes.

The official data from HMRC has revealed that the number of small buy-to-let landlords dropped during 2019. This is partly because of the latest reduction in tax relief.

Moore, the accounts and business advisors, has shared that the number of buy-to-let landlords with five to nine properties also fell last year. It dropped from 159,000 in 2018 to 157,000 in 2019.

Smaller landlords have been driven out of the market by cuts to tax relief and increases in Stamp Duty introduced by the Government since 2015. The buy-to-let industry is becoming less commercially viable for smaller landlords, as many are now paying considerably more tax.

Jonathan Green, partner at Moore, has commented: “For some small landlords the latest tax relief cuts are likely to be the final straw, pushing them out of the market.”

“Investment by small buy-to-let landlords has helped to improve the quality of rented properties in the UK – driving them out of the market could have a negative impact on tenants.”

“Changes to the tax regime, such as cuts to reliefs and hikes to Stamp Duty Land Tax, will always be felt disproportionately by smaller landlords. Rental profits have been squeezed to the point where buy-to-let no longer makes financial sense for some.

“Buy-to-let landlords with smaller portfolios make up a huge part of the rental market. If their numbers continue to fall it could create a supply deficit which may result in higher rents longer term in some areas.

“Larger, more professional landlords, look to be unphased by legislative changes in recent years – bigger margins means these changes can be more easily absorbed.”

All is Not Lost: Property Market Springs Back to Life in May

Published On: June 25, 2018 at 8:58 am


Categories: Property News

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Though a progression in the property market may have taken a little longer than expected this year, according to HMRC data, a 12.1% increase in transactions has surfaced during May.

During the April period, there was a registered drop in sales according to HMRC’s property transaction statistics. However, recent data suggests a far more optimistic future for the market.

As recorded by the taxman, despite there being a 1% drop, annually, 95,480 residential property transactions witnessed a rise of 12.1% in April.

All regions in the UK experienced a monthly rise. The Welsh market saw an increase of 25.2% to 4,460 transactions. In addition, England was up by 12.4% in sales to 80,900. As for Northern Ireland, there was a 10.8% jump over the month to 2,150 deals, whilst Scotland’s transactions were up by 3.6% to 7,970 on a monthly basis.

When considering previous figures from 2017, Wales and England were down by 0.4% and 0.5% annually, while Scottish transactions fell 7%. Northern Ireland was an exception, seeing a soar in annual sales, of 1.8%.
Remarking on the non-adjusted figures, Neil Knight, Business Development Director of Spicerhaart Part Exchange & Assisted Move, said:

“While we are still nowhere near the levels we were seeing before the credit crunch – when the number of transactions had risen constantly over a number of years to reach a peak of around 150,000 per month – it is a marked increase and could suggest we will start to see a bit of an uplift, especially in the new build sector.

“We are currently working with a range of house builders that have got lots of big developments in the pipeline.

“The focus on new housing over the past few years – with incentives such as Help to Buy – is starting to boost the new-build sector, and while we are unlikely to hit the Government’s targets, we are at least moving in the right direction, and this should help boost the rest of the property sector too.”

Residential property transactions rise in July

Published On: August 23, 2017 at 12:01 pm


Categories: Property News

Tags: ,,,

Seasonally adjusted data from HMRC suggests that there were 104,760 residential property transactions in Britain during July. This was a rise of 1.3% on June and 8.3% higher than at the same period of 2016.

However, HMRC urged caution when making comparisons in transactions levels for July, as some buyers could have been deterred by political uncertainty caused by June’s General Election and the EU referendum one year previously.


Danny Waters, chief executive officer of Enra, noted: ‘After three consecutive falls, it’s encouraging to see property transactions start to pick up again. The political and economic upheaval we have seen in recent months has plagued the property sector, so this increase could be an indication that buyers and sellers are beginning to feel more confident.’[1]


Residential property transactions rise in July

Residential property transactions rise in July

Record-low interest rates are likely to keep demand high, however the Government must address the ongoing issue of supply. These are the views of General Mortgage Club Director Jeremy Duncombe.


Mr Duncombe said: ‘We need a long-term solution by building more homes allowing a greater number of affordable properties to come onto the market.

This will not only provide more choice for second and last-time buyers, but also free up additional housing stock for first-time buyers to secure homeownership.’[2]




Stamp Duty cited for increased April transactions

Published On: May 23, 2017 at 2:05 pm


Categories: Finance News

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The most recent analysis from HMRC has revealed that property transactions dipped slightly during April – dropping by 3.2% in comparison to March.

HMRC’s data reveals that the provisionally seasonally adjusted UK property transaction count for April 2017 was:

  • 99,910 residential
  • 9, 980 non-residential

These figures were 20.3% higher than in the same month of last year.

Stamp Duty

However, HMRC have quickly moved to state that direct comparisons of residential transactions between April 2017 and April 2016 should be avoided for one specific reason. This was due to the introduction of the 3% Stamp Duty surcharge being introduced in April 2016.

Stephen Wasserman, Managing Director at West One Loans, observed: ‘The property market will take a while to fully recover from the jitters caused by stamp duty hikes and economic uncertainty. On top of this, the result of the upcoming General Election is likely to have an impact over the coming months. Nevertheless, we’re confident the sector will bounce back. Although the market is resilient, during times of prolonged economic uncertainty it is important that borrowers are aware of the range of financing available. Flexible borrowing options, such as bridging loans, can help to speed up the transaction, enabling buyers to move faster and capitalise on opportunities in this uncertain environment.’[1]

Shaun Church, Director at Private Finance, also noted: ‘While residential transaction levels are significantly higher than a year ago, the changes to stamp duty for second homebuyers in March 2016 render an annual comparison pointless. Homeowners and investors rushed to beat the deadline last year, which led to an explosive March followed by a quiet April for the residential market. Today’s market remains slightly sluggish, with the number of seasonally adjusted transactions dipping between March and April.’[1]

Stamp Duty cited for increased April transactions

Stamp Duty cited for increased April transactions

‘The upcoming election is unlikely to be having a significant effect on property transactions, particularly as the residential market took last year’s Brexit vote in its stride. The main reason behind weaker transaction figures remains the changes to stamp duty, which have particularly limited activity towards the upper end of the housing market.’[1]

Steady Progress

Jeremy Leaf, former RICS residential chairman, commented: ‘At first glance one might think these figures are hugely disappointing but when you consider what was happening this time last year and what has happened to property transactions in the past few months, they represent steady progress for the housing market. Transaction numbers are really key to what is going on in the market – how many people are actually getting on with the business of moving – and these numbers suggest some resilience.’[1]

‘What the HMRC figures do show is the huge impact that changes to stamp duty can have, not just on property transactions but the wider economy bearing in mind how many people are dependent in other trades on people moving home.’[1]



Will Stamp Duty be cut in today’s Autumn Statement?

Published On: November 23, 2016 at 10:21 am


Categories: Finance News

Tags: ,,

Today sees one of the most important Autumn Statements of recent years. The eyes of the property market are eagerly watching with interest to see if Chancellor Hammond will make any big announcements for the sector.

The latest figures from HMRC has revealed the substantial impact that the 3% Stamp Duty Land Tax surcharge has had on investors. It is hoped that these figures will convince Mr Hammond to make changes today.

Tax changes ahead?

Nick Leeming, Chairman at Jackson-Stops & Staff, noted: ‘Changes to the way in which stamp duty is levied have gone too far. While the changes seen in December 2014 were good news for 98% of property buyers, those implemented in the last budget announcement which saw an additional 3% charge levied on buyers of second homes has resulted in a substantial decline in transaction numbers.’[1]

‘It is quite clear that any Government hopes of more revenue from Stamp Duty Land Tax for residential transactions has not materialised and if overall Budget tax revenue projections are to be achieved more tax rises will be needed elsewhere. The 2016 Autumn Statement urgently needs to address this shortfall by incentivising people to move home. Removing the additional 3% levy will in my opinion do just that, while further measures to support both downsizers and first time buyers must also be implemented if we are to see a true shift in overcoming the housing crisis,’ he added.[1]

Encourage alterations

Meanwhile, Nimesh Shah, partner at accountants Blick Rothenberg, believes: ‘The latest statistics should encourage the Chancellor to urgently reform SDLT and in particular, reverse the alarming effect the 3% SDLT surcharge has had on the housing market. The forthcoming change to the mortgage interest relief restriction should also be reviewed in light of the slowing housing market.’[1]

Shah feels, ‘The Chancellor has a real opportunity to make a meaningful reform to an outdated and complicated tax system that is now system that is now acting as a deterrent to people moving or entering the property market.’[1]

Will Stamp Duty be cut in today's Autumn Statement?

Will Stamp Duty be cut in today’s Autumn Statement?


Statistics from the HMRC indicate that residential property sales have fallen since March. In fact, they are down by almost 80,000 over the same period in 2015 (1 April 2015 to 31 October 2015).

Paul Haywood-Schiefer, Assistant Manager at Blick Rothenber, said: ‘These are the worst sales figures for the same 7 month period for the past 3 years. The actual drop in sales since April is just 630 properties short of wiping out the bumper number of extra sales in the boom month of March when people rushed to beat the 3% SDLT surcharge on second properties.’[1]

‘The actual SDLT increase over the last 12 months is £972m. However, the last 6 months, when the 3% surcharge has been applicable, has only accounted for a paltry £94m of that increase. This is about 0.017% of the total receipts HMRC has collected from al taxes in the last 12 months.’[1]

Concluding, Mr Haywood-Schiefer, said: ‘These statistics show that not only has the market been stunted by the 3% SDLT surcharge on additional properties, which was introduced with the intention of helping first time buyers get on the property ladder by making it more expensive for those purchasing additional properties to buy the same property, but it is not actually adding a significant windfall to the Revenue’s coffers either.’[1]




HMRC urges landlords to take advantage of Let Property Campaign

Published On: October 11, 2016 at 1:39 pm


Categories: Landlord News

Tags: ,,,

Since the Let Property Campaign was launched in 2013, there have been more than 13,000 disclosures from buy-to-let landlords.

The Let Property Campaign was launched by the HMRC to assist landlords in paying the correct amount of tax. It offers an opportunity for landlords owing tax through letting out properties to get up to date with their arrears.


To date, the tax campaign has raked in £50m in unpaid tax, with HMRC believing that most investors failing to declare their earnings owe just a few hundred pounds in tax each year.

Many investors owing tax are thought to be smaller scale or amateur landlords, or so-called accidental landlords letting out a home they are unable to sell.

HMRC is urging people to come forward, stating that the Campaign will give those in arrears the chance to take advantage of the best possible terms.

A HMRC spokesperson said: ‘If you’re a landlord and you’ve undisclosed income you must tell HMRC about any unpaid tax now. You’ll then have 90 days to calculate and pay what you owe.’[1]

‘If you make a full and voluntary disclosure of all unpaid liabilities in these circumstances you can usually expect a lower penalty than HMRC would otherwise seek if they raised an enquiry or compliance check without the disclosure,’ they continued.[1]


There are growing concerns that professional landlords are using Airbnb and other home sharing websites to not pay their taxes. Under current tax rules, one is legally permitted to earn £7,500 before tax is permitted to be paid.

However, reports are suggesting that a rising number of landlords are using the service in order to let their properties, as they can earn more money than through traditional rents. In addition, they are letting their rooms for more than 90 days a year, in breach of housing regulations.

A further issue is that leaseholders are letting on Airbnb. Recently the Land Chamber ruled that a leasehold flat owner has broken the law by letting out her property in breach of her lease, which stated the apartment was a ‘private residence.’

HMRC urges landlords to take advantage of Let Property Campaign

HMRC urges landlords to take advantage of Let Property Campaign


‘Regardless of whether the errors were due to misunderstanding the rules or deliberately avoiding paying the right amount it is better to come to HMRC and admit any inaccuracies rather than wait until HMRC uncovers those errors,’ the spokesperson continued.[1]

They added that any amount due would depend on why a person failed to dispose their income. As such, someone who has purposely kept information from HMRC will pay a greater penalty than if they have made a mistake.

Concluding, the spokesperson said: ‘This is an opportunity to stop worrying about what might happen, have certainty about what you owe and get things right for the future.’[1]