What has the Stamp Duty Holiday done for real estate investing in the UK?

As the stamp duty holiday draws to a close, property investment firm Fabrik Invest reports that the policy, which was introduced in July 2020, has done a lot to support investment in the UK property market.

This investment is absolutely necessary; Hamptons reveals that the UK rental sector now has 250,000 fewer rental units than at its peak in 2017.

Dale Anderson, Managing Director, Fabrik Invest mentionned:

“The stamp duty holiday has worked on several fronts after almost a year of operation.”

“It was not only families looking for more spacious accommodation that were prompted to act – many investors also seized the opportunity to make substantial savings.

The savings have certainly been substantial.

As part of the stamp duty holiday, anyone who purchases a property and finishes it before June 30, 2021 does not have to pay tax on the first £ 500,000 of its value.

Fabrik Invest has seen investors rush to take advantage of it.

Over the past three months, investors in a single development have saved over £ 100,000 in stamp duty that would otherwise have been due.

The development in question is Chatham Waters in Kent.

Just over half an hour from London by train and completed in November 2020, the one, two and three bedroom homes offer waterfront living with a range of upscale amenities onsite.

“Over the past six months, our Chatham Waters investors have saved over £ 60,000 through the stamp duty holiday.”

“The biggest savers were the first buyers, with some having saved more than 50% of the stamp duty they would otherwise have had to pay.”

“The holidays have certainly supported more activity in the buy-to-let sector and encouraged some first-time buyers owners to be involved”, Anderson continued.

Interestingly, Hamptons also noted the importance of early owners, with Head of Research Aneisha Beveridge noting that“The stamp duty holiday has prompted more small and new homeowners to buy-to-rent, reversing a shift towards portfolio investors. ”

Low interest rates have also played a role in attracting new homeowners to the area – a change that many see as vital to the long-term attractiveness of rentals.

“The UK is grappling with a fundamental housing shortage. ”

“Government policy has driven down the number of rental units available over the past four years, despite continued growth in the number of tenants. ”

“We hope that those who are attracted to rental investment for the first time because of the stamp duty holiday will now remain in the area and further increase the number of homes available to UK tenants”, Anderson concluded.


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