The announcement of the Stamp Duty (SDLT) surcharge on second home purchases has had a limited impact on landlord behaviour, data from Hamptons has found.
The research revealed that 10.7% of sales agreed across Great Britain in November went to a landlord, above the 2024 average to date of 10.2%.
While landlord purchases remained below the 2015 peak of 15.7%, the figure was broadly in line with more recent years, when buy-to-let (BTL) purchases have become rarer.
Landlords accounted for 10.8% of buyers in 2019 and 10.9% in 2020, years when movers made up a much larger share of the market.
The analysis by Hamptons showed that most investors who agreed deals in advance of higher Stamp Duty rates being announced in the Budget have remained committed to their purchase.
28% of sales agreed by investors in the three months running up to the Stamp Duty surcharge increase were either renegotiated or remarketed, around half the level recorded during the aftermath of the 2022 mini-Budget when mortgage rates rose quickly.
The introduction of the 3% SDLT surcharge increasingly pushed investors towards the North of England, where Stamp Duty bills tend to be lower because of lower property prices.
Since the introduction of the surcharge, the largest falls in investor purchases were in the South of England – particularly outside London – where high SDLT bills can make BTL unviable.
On a £500,000 purchase, the Stamp Duty bill for an investor now stands at £37,500 (7.5%), rising to £40,000 (8.0%) from 1 April 2025.
In Scotland, where the Stamp Duty surcharge rose from 6% to 8% on 5th December 2024, revenue from investors and second home buyers accounted for an overage of 31% of total Stamp Duty revenue during 2024 (January to October 2024), suggesting a limited number of landlord purchases.
Figures also showed that investors purchased 5.8% of homes in Scotland so far this year, down from 10.3% when the initial stamp duty surcharge was introduced.
Meanwhile, in England, the share of revenue from investors and second home buyers stands at 47%.
Aneisha Beveridge, head of research at Hamptons, said: “Early signs suggest that new landlords have shown relative resilience to yet another cost increase.
“While the number of buy-to-let purchases by landlords remains muted by historic levels, their numbers have not collapsed.
“However, purchases are confined to the Midlands and Northern England which are becoming buy-to-let heartlands where the surcharge bites slightly less hard.”
She added: “While no landlord will welcome a tax rise, falling interest rates next year will likely push buy-to-let returns to near the top of investment league tables.
“With savings rates heading closer to 3%, gross yields in Northern England of above 8% will increasingly attract money that would previously have gone elsewhere.
“While political headwinds haven’t gone away, these risks and added costs are increasingly being priced into buy-to-let returns in the form of higher yields.”
Beveridge concluded: “After an unprecedented four-year boom, rental growth for newly let properties has slowed to a crawl.
“The current level of growth is similar to pre-covid times when rents typically rose between 2% and 3% a year.
“However, the forces that pushed up rents haven’t entirely gone away.
“Tenants renewing contracts continue to see increases well above these levels, but the pace of these increases will slow as their rents climb closer to market rates.”
