A London estate agency says one of its buyers wants to delay completion until November 1 “just in case stamp duty is changed in October”. Aylesford International director Brendan Roberts says one of his firm’s buyers made the request following speculation that stamp duty could be lowered by Chancellor Sajid Javid.
“Anyone looking to sell is unlikely to conclude a sale much before late October even if they found a buyer early September, so agreeing a delayed completion to allow for any changes in SDLT shouldn’t create too much inconvenience and with buyers thin on the ground it is useful to be flexible and adapt to help buyers commit” explains Roberts.
The move follows widespread speculation by government ministers that stamp duty will be reformed – but without saying when or how. Other agents report alternative tactics pursued by purchasers keen to avoid paying more SDLT than they need – but these raise questions over whether conveyancers would help.
“We have had a pronounced increase in enquiries from clients seeking to utilise the existing ‘mixed use’ stamp duty concession. This concession is still not well understood but can yield dramatic savings on higher value properties” explains Gideon Sumption of Stacks Property Search.
“There is a huge and obvious incentive to look at mixed use property where the maximum rate of SDLT is five per cent. There is no current legal definition but such is the amount of money involved there will almost certainly be some case law soon” Sumption continues.
“The current understanding is that for mixed use SDLT to apply, the property needs to have a commercial element, namely enjoy commercial income from land or buildings that from part of the whole. This could be a self-contained annexe let on an assured shorthold tenancy, some pasture let to a farmer or some buildings let as workshops. What won’t qualify are extensive grounds used purely for the enjoyment of the house.”
Another Stacks agent, Bill Spreckley, says buyers are becoming “more and more aware “ not only about the mixed use option but also how so-called ‘multiple dwellings’ can attract lower SDLT.
“If you buy a property with ‘Multiple Dwellings’ – that is an annexe, cottage or flat – then there are discounts available. One takes the price of the whole property, divide it by the number of properties, work out the SDLT per property and then multiply that figure by the number of properties again” he says. He says a principal property sold with two cottages counting as ‘multiple dwellings’ – each sold at a notional £666,666 – would attract stamp duty of £69,999 but sold as one unit at £2m it would incur SDLT of £153,750.
Barclays has introduced a new set of rate reductions to its buy-to-let and residential ranges. In total, there have been 19 changes, with cuts of up to 0.13%.
In Barclay’s BTL section for purchase and remortgage, the 60% loan-to-value (LTV) two-year fix with £1,795 product fee has had its rate cut from 1.42% to 1.37%.
Barclays recently launched a new five-year fixed rate buy-to-let product at 75% LTV. The purchase only deal is available at 2.19% and is subject to a £1,295 product fee. Last month, the lender cut its 75% LTV two-year fixed rate deal from 1.68% to 1.65%. This deal is subject to a £1,795 fee and a maximum loan value of £1m.
Craig Calder, director of mortgages at Barclays, said: “The new reductions we have announced will ensure we continue to offer a highly competitive fixed rate range that provides certainty of payments.”
The Labour Party could bring in a radical “right to buy” scheme if it gains power at the next general election which could help millions of private tenants in the UK to buy their rented homes at a reasonable price, the shadow chancellor has suggested.
John McDonnell is promoting the idea as a way to make it easier for workers to buy the homes they live in, while also tackling what he calls the “burgeoning buy-to-let market” and the problem of landlords who do not maintain their properties.
In what would be a day of reckoning for many of Britain’s 2.6 million landlords, the mooted right-to-buy scheme in the private housing market would echo Margaret Thatcher’s policy of the 1980s relating to government housing, under which millions of council tenants bought the property in which they lived. Mr McDonnell set out some loose guidelines for the Labour idea – first suggested by Jeremy Corbyn during his 2015 bid for leadership of the party – based on the premise that the sum paid by tenants wishing to buy their dwelling would not necessarily be the market price.
“You’d want to establish what is a reasonable price, you can establish that and then that becomes the right to buy,” he told the Financial Times. “You (the government) set the criteria. I don’t think it’s complicated.”
Mr McDonnell suggested the plan would be a way of redressing problems such as landlords refusing to invest in their properties while making a “fast buck” at the cost of their tenants and the community.
“We’ve got a large number of landlords who are not maintaining these properties and are causing overcrowding and these problems,” he said.
Mr McDonnell also detailed a bold share transferal proposal, under which a Labour government would confiscate some £300 billion of shares in 7,000 large companies and hand them to workers, in what would be one of the largest ever raids by a government on the private sector seen in a western democracy. Under that plan, every company with more than 250 workers would have to gradually transfer 10 per cent of their shares to their employees, the paper said.