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Buy-To-Let Stamp Duty May Increase Rents

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http://www.ftadviser.com/2016/03/01/investments/property/buy-to-let-stamp-duty-may-increase-rents-Ddv8avuQ6ws0Njd2OJf6aM/article.html?

Simon Bayley, commercial director of Foundation Home Loans, has argued the 3 per cent stamp duty surcharge will filter down in the form of increased rental charges.

I seem to recall something about sh1t rolling downhill.

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It is not quite fear though is it? Average rents have increased quite a bit in the last few years, just as house prices have since the various HTB schemes have been introduced. When landlords sell up, the rents for homes still left for rent will be unlikely to fall, that is for sure. If rents increase further it may well drive FTBs to try and spend even more on a home to avoid renting.

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It`s very good of the Landlords to not charge the maximum rent at the moment though, given that they intend to put it up later because of the stamp duty thing. What`s that, they ARE charging maximum rent at the moment?

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Go against all known economic principles surrounding rents.

The fallacy being that rents are charged on a cost plus basis. Evidently untrue.

thats the aim though...the reality is people pay 1. what they can afford, preferably less and 2. what they can prove on the the reference.

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In a battle to find tenants between an unleveraged landlord who hasn't seen his interest payments rise and therefore hasn't raised rents or a leveraged one who has, guess who finds the tenant and doesn't suffer a very expensive void?

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Ah, the old trickle down economy chestnut being applied to rents, trouble is the foundations of the pyramid are already tapped out with the chief leach also after more cash, the budget in 2 weeks will be a turning point.

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If rent increases do materialise I would bet it has more to do with the living wage than BTL stamp duty.

Not that the likely suspects will acknowledge it.

Edited by 25 year mortgage 8itch

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If tax rises means that less people go into BTL, then house prices will fall and some renters will buy. Therefore it could cause rents to drop (if enough renters buy) I doubt that will happen due to lack of housing etc but it should not cause rents to rise.

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