The new legislation introduced by George Osborne came into play on April the 1st 2016, adding an extra 3% in stamp duty fees for those buying a second property. That’s a hefty £6,000 on a £200,000 property purchase.
So how is this going to affect where second home buyers purchase? Currently, the top locations for second homes are in areas of natural beauty. Over half are near the coast, with the remaining based around the Peak District, Cotswold’s, North York Moors, Chilterns or the South Downs.
As an example, before April 2016, the stamp duty payable on an average home in the Cotswold’s was £10,640, in April this rose to £23,024, an increase of 116%. However, this is far lower than the average rise for other home areas which saw rises of up to 270%.
Research by the Telegraph have come up with a list of 20 locations that will suffer less from the stamp duty increase. They are all based in the southern half of England, 10 of which are all the closest second home areas to London.
The most northern of these top 20 locations in north Norfolk, with demand higher around the coastal areas. On the Suffolk coast, popular areas are Southwold, Dunwich, Walberswick and the Broads.
You can have a look at the list here.
The top 20 from this list all have growing housing markets. Areas in Devon and Dorset are much better placed than Cornwall for these stamp duty rises, as higher annual house price increases will be able to offset the hike in stamp duty.
So in spite of the recent stamp duty rises, people looking to purchase a second home do still have a lot of options – it’s just a case of doing your research and being smart when choosing your location.