Sipp firm founder: Retirees will be deterred from buy to let

The founder of a Sipp provider says many retirees will have soured on their plans to invest in buy to let homes after the Autumn Statement. The Treasury announced yesterday that higher rates of Stamp Duty Land Tax will be charged on purchases of additional residential properties, such as buy to let properties and second homes, with effect from 1 April 2016.John Spiers, who founded Sipp provider BestInvest, said: “The 3% extra for new build BTL properties will deter many people who might have been thinking of investing in that when their pension allowances are slashed next year.”Mr Spiers, the chief executive of EQ Investors, said: “I’m puzzled why they expect to raise so much extra revenue since the evidence of the last stamp duty change has been that it kills the market.”Murray Smith, sales and marketing director, from Sipps firm Mattioli Woods, said: “This is a heavy blow to clients with buy-to-let properties and second homes, as this is in addition to changes that mean landlords can no longer offset their mortgage interest against tax on rental income.”{desktop}{/desktop}{mobile}{/mobile}The Chancellor is aiming to reduce the number of buy to let investors coming to market, enabling first time buyers to take their place, according to accountancy firm, Wilkins Kennedy, which said it could have a different short term effect to that which was intended.Matthew Hall, who is head of tax and partner at top-20 accountancy firm, Wilkins Kennedy, said: “Those who have been considering investing in property could now decide to accelerate their plans following today’s announcement. This could mean that it will have the opposite effect over the next few months until April 2016 as investors flood the market as opposed to first time buyers and driving up house prices in the process.“Earlier in the year, Osborne announced the reduction of tax relief on mortgage interest payments and made changes to the Wear and Tear allowance. Now landlords are facing a higher Stamp Duty, so we could see either higher rents or reduced rental supply in the longer term.“It will be interesting to see how the housing market changes between now and April, whether we will see a little bit of heat and how house prices are affected as a result.”

Sipp firm founder: Retirees will be deterred from buy to let

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