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Landlords take advantage of Stamp Duty Holiday by expanding portfolios

Landlords take advantage of Stamp Duty Holiday by expanding portfolios

According to research conducted by Direct Line business insurance, 60% of multi-property landlords have expanded their property portfolio since the Stamp Duty Holiday began in July 2020, with this figure rising to 79% among commercial landlords.

The data, obtained via an Opinium survey of 200 multi-property landlords in February 2021, shows that multi-property landlords have been particularly strategic when making their purchases. 43% revealed that they have invested in properties located outside of major cities, with 82% of these landlords doing so with the expectation that a significant number of renters will move out of cities because of the Covid-19 pandemic and the continued upsurge of remote working.

A man talking to his colleagues via video call as he works remotely.

The report revealed that 50% of landlords believe that the Stamp Duty Holiday has kept the property market afloat during the Covid-19 pandemic, while 43% say that it has motivated them to fast-forward plans to purchase properties to boost their portfolios.

According to online mortgage broker Trussle, it takes 134 days to complete a property purchase in the UK. Before Rishi Sunak announced the extension of the Stamp Duty Holiday, many landlords were worried about getting their deals over the line before the previous deadline of 31st March 2021, with 45% fearing the worst with regards to the impact it could have on the market and the value of their portfolios. However, those concerns have been put to rest for the time being, with the deadline having been moved to 30th June 2021.

An hourglass in sand

The survey found that many landlords were “prepared to take desperate measures to try to get their purchases over the line before the expiration date”. 30% of landlords were prepared to cut corners if it meant they’d be able to get their purchases completed before the deadline, with many willing to take on parts of the conveyancing process themselves or even skip a rigorous property survey. 75% of multi-property landlords claimed they would pull out of transactions if they were unable to complete their live purchases before the 31st March deadline.

The Covid-19 pandemic is also influencing the way landlords use their properties, with 36% having changed their type of let since March 2020. Of those landlords, 14% have listed their property as a holiday home, short-term let or Airbnb, with the same number having changed their property to a bed and breakfast. 11% have changed commercial property to residential, with 7% planning to make changes in the future.

Scientist working in a lab

Jamie Chaplin, Direct Line’s Landlord Business Manager, said: “It’s been encouraging to see the property market so buoyant since the Stamp Duty Holiday was introduced. And it’s been interesting to see more landlords invest in rural properties, suggesting they’re responding to the rise of flexible working and the possibility of people leaving major cities to work remotely.”

Chaplin added: “As landlords focus on growing their portfolios and taking advantage of the Stamp Duty Holiday, we’re here to help them protect their new properties and provide them with the value they need from their insurance offering. At Direct Line business insurance, we offer Landlord Insurance designed to help get your property back up and running should something go wrong.”

 

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