George Osborne has announced that the government will raise tax on buy-to-let properties by three per cent.
The idea behind the stamp duty hike, which will come into force in April, is to cut government spending, raise revenues and to make it easier for people to get on the property ladder.
People buying a home to let should not be squeezing out families who can’t afford a home to buy.
I am introducing new rates of stamp duty that will be three per cent higher on the purchase of additional properties like buy-to-lets and second homes.
- George Osborne
In a wide-ranging announcement on housing, the chancellor also said that the Help to Buy scheme will be extended by a year (to 2021) and that 400,000 new homes will be built across the country.
The Tories have been under pressure to improve the availability of homes for first-time buyers.
Following the Conservative Party conference in September, the housing charity Shelter released this map showing where families on the National Living Wage could actually afford to buy a home on the government's flagship "starter homes" scheme:
Before the general election, in his own bid to raise revenues and ease the housing shortage, former Labour leader Ed Miliband (remember him?) had planned to introduce rent caps, introduce longer leases and remove tax reliefs for rogue landlords.
Where Osborne's proposal differs is that people who already own second homes will be unaffected - thus not alienating that group of the electorate.