Increasing stamp duty on second homes may slow down some property purchases in the short term, particularly from those looking to invest in property as an alternative income source.
However, demand for prime London locations is historically resilient. Buyers may pause to reassess financial implications, but high-demand areas are likely to retain interest.
This may lead to greater negotiation around price and a potential increase in demand for homes offering high rental yields.
By making second-home ownership more costly, the policy could encourage prospective buyers to invest in primary residences in seaside towns rather than keeping these properties vacant for much of the year.
STABLE POPULATION
In the long run, this shift could benefit local economies by fostering a more stable, year-round population that supports local businesses and services consistently.
Additionally, it could alleviate the housing shortage in these areas, making coastal properties more accessible to those who live and work there, and helping these communities thrive as vibrant, sustainable places to live.
“Keeping CGT at 18% for basic rate taxpayers and 24% for higher-rate taxpayers on BTL and second properties may continue to incentivise landlords to sell.”
Keeping CGT at 18% for basic rate taxpayers and 24% for higher-rate taxpayers on BTL and second properties may continue to incentivise landlords to sell – something we are already seeing as landlords become cost-conscious through increased mortgage costs.
FIRST-TIME BUYER BOOST
This will benefit first-time buyers if there is an increase in stock, making the housing market more competitive and price-sensitive.
The absence of tax benefits for non-doms may impact the high-end London market, traditionally popular with international buyers. Without the added tax advantages, fewer non-domiciled investors may consider London as favourably, potentially creating an opening for domestic buyers to secure property that might previously have been beyond reach.
“These policies together could lead to a modest cooling in the buy-to-let sector, with more landlords exiting or reconsidering new purchases. Overall, this budget isn’t as dramatic as feared from a property perspective.
