Industry Reactions: How might the Tory foreign buyer tax affect the UK property market?
October 2018 - Prime Resi
“Do we really need another tax? The concern is that even the proposing of this tax by government creates more uncertainty in an already unsettled market. This can lead to greater illiquidity that will frustrate everyone, not least of all the British home seller. Transaction levels have already decreased on the back of two SDLT changes and prices have softened, so discouraging foreign investment will only lead to a further reduction in transactions, particularly in London.
“The immediate and wider impact of this is clear when you consider the number of professionals involved in a singular transaction – from selling agents and buying agents through to lawyers, tax advisors, bankers, interior designers, architects, and many more.
“Furthermore, foreign investors are already likely having to pay the extra 3% surcharge that was introduced in April 2015 on second homes and investments, so it seems rather punitive to introduce an additional layer.
“We advise our clients – an even split between UK- and foreign-residents – on how best to future proof their buying decisions, and a key part of this is ensuring they pay the right £psf. If the potential resale market will be narrower due to fewer foreign investors, this will naturally influence our advice as to what price our clients should be paying.
“We don’t want to see the scales tip any further against property investment.”