As announced several months ago, there is now an extra 3% SDLT to pay if you buy a home which you want to rent out.
Landlords are buying for the rental income, which is a fixed figure, so the total they are prepared to pay is a fixed figure. The higher the tax, the lower the price the vendor receives and vice versa.
We would expect prices to rise following the announcement and then fall when the tax comes in. Landlords are buying up approx. half of homes, so the fall ought to be approx. half of 3%.
Which is exactly what happened. From Reuters:
On April 1, a three percentage point stamp duty hike was imposed on people buying buy-to-let properties. Estate agents have previously reported dealing with a bottleneck of investors rushing to push sales through before the tax increase on this date.
Rightmove said the average price of a typical buy-to-let property - that with one or two bedrooms - dipped in April by £2,686 month-on-month to reach £182,926, as investors' interest in the market became more subdued.
£2,686 divided by £182,926 = 1.5%.
So, for half of purchases, the landlord buyer is offering 3% less and for the other half the owner-occupier buyer is offering the same as before. Average drop predicted and observed = 1.5%.
Thus where landlords are buying, the extra SDLT is being paid/borne by vendors and not by landlords. This is in the nature of taxes on land values, even crude ones like SDLT. Absolutely none whatsoever is borne by tenants - if landlords could magically charge higher rents to cover the extra SDLT, then prices would not have fallen.
Simples.
Debate Magazine
