One in four houses bought last year on the Isle of Wight were purchased as second homes or properties to rent out, figures show.
According to HMRC data, second home buyers – including property investors and landlords buying houses to rent out – were undeterred by new taxes on extra properties.
A second home is defined by HMRC as a property that is bought by buyers who already have primary residences.
26% properties sold were second homes
Last year 26% of the properties sold on the Isle of Wight were classified as second homes.
Around 900 were bought in the financial year 2017-18, with a combined value of £203 million.
That’s despite an extra 3% stamp duty charge on additional properties, introduced in April 2016 as part of a government effort to deter buy-to-let landlords, property investors and second home owners.
Up by 20% on Island
The number bought last year on the Isle of Wight has increased by 20% since 2016-17, when around 750 second homes were purchased.
In England, almost one in four properties bought last year were classified as second homes.
Around 232,000 second homes were bought, with an estimated value of more than £70 billion.
Impact on local communities
The National Housing Federation, which represents housing associations, said it was concerned about the impact that buying extra properties has on local communities.
Policy leader Will Jeffwitz said:
“In any community, if more homes are bought up as second homes then there are fewer available for residents – and the houses left are more unaffordable.”
“If families and young people are priced out of their local communities it can have a hugely demanding impact on community life – with village shops, schools and pubs closing in alarming numbers as a result.”
Stamp duty for first time buyers
The NHF praised the Government for reducing stamp duty for first time buyers, but urged that more investment was needed in social housing.
Mr Jeffwitz said:
“Our solution is that there should be a renewed focus on building more affordable housing, which reduces the impact of a high ownership of second homes.”
Lawrence Bowles, research analyst at estate agent Savills, said that first-time buyers are still at a “fundamental disadvantage”, despite the new tax.
“First time buyers will typically be buying with a mortgage, and buy-to-let landlords will often have the money in their account, ready to go.
“Sellers prefer that over mortgages because of the certainty – there’s always a risk associated with a mortgage.”
£16 million stamp duty
In total, around £16 million was collected from stamp duty on the Isle of Wight last year.
HMRC figures say that duty on additional dwellings made up 52% of that amount. The Treasury said that the Government’s priority is to “support first time buyers”.
A Treasury spokesperson said:
“We want to support the dream of home ownership for the next generation.
“Higher rates of stamp duty on second homes means we can afford to offer more support to first time buyers through the stamp duty relief.”
Article shared by Data Reporter as part of OnTheWight’s collaboration with Press Association and Urbs Media