Chancellor Rachel Reeves has increased the stamp duty surcharge on second homes and investment properties from 3% to 5%, effective from tomorrow.

Announced in today’s Autumn Budget, Reeves stated: “In our manifesto we committed to reforming stamp duty land tax to raise revenue while supporting those buying their first home.”

“This will support over 130,000 additional transactions from people buying their first home, or moving home, over the next five years.”

Prior to the Budget, it was widely expected that Reeves would not extend the lower stamp duty threshold for first-time buyers (FTBs) in the Budget.

Mortgage industry participants share their “disappointment” by today’s decision to increase the stamp duty on second homes.

CHL Mortgages commercial director Ross Turrell says: “Today’s Budget clearly calls for careful consideration from the buy-to-let (BTL) market. But, given the sector’s proven track record for successfully navigating ever-shifting regulatory and economic landscapes, we should be wary of excessive doom-mongering.”

“Just look at the challenges that BTL landlords have had to respond to over the past decade – while almost every regulatory, tax or legislative reform is framed as an existential threat, the market consistently demonstrates resilience and adaptability.”

Turrell urges the industry to shift the focus to “collaboration and building confidence among borrowers, landlords, and brokers as they adjust to new regulatory and tax changes”.

“While it’s tempting to dissect each policy and focus on their potential negatives, our priority must be on providing robust education and support. The reforms have been made – with the right guidance, lenders can help landlords adapt with confidence to ensure a sustainable and resilient BTL market for years to come.”

Meanwhile, Zoopla head of research and insight Richard Donnell comments: “The extra 2% cost on buying second homes and investment property will reduce demand from second home buyers and investors. Second home buyers are already responding to last year’s Budget which allowed councils to charge double council tax for second homes.”

“This is resulting in a higher level of selling by second home owners. In areas with above average second homes we have seen four times more homes come to the market.

“This announcement also comes with changes announced previously which will see first time buyers pay more from next year. A return to previous stamp duty thresholds from April 2025 will result in an additional 20% of first-time buyers being liable to pay stamp duty and a further 14% will be required to pay a partial amount.”

“The impact is felt across London and the South East in markets with average house prices over £425,000. This will increase costs for buyers by an average of £5,600 in London and £1,390 in the South East.”

“In parts of London with home values over £600,000, FTB could pay an additional £15,000 in stamp duty. Buyers will want to take this off the price they pay for homes, keeping price rises in check.”

ARLA Propertymark president Angharad Truman adds: “We continue to see a growing disparity in the number of private rented homes available against a backdrop of increasing demand from tenants. Therefore, it is disappointing to see that the UK Government did not address this fundamental issue in its Autumn Budget and instead has announced yet another blow for landlords by increasing stamp duty on second homes.”

“The private rented sector plays a crucial role in housing the nation with over 4.6 million homes in England alone, therefore it is imperative that the UK Government does not continue to push landlords out of the market.”

“In order to ultimately keep people in much needed and affordable private rented homes, we continue to stress the importance of support for the private rented sector including incentives for landlords to invest rather than continuing to penalise them through regulatory bombardment and increasing costs.”