Buy-to-let lenders bear the brunt of George Osborne’s tax and spending plans as the chancellor uses the Autumn Statement to hike stamp duty on investment properties and second homes by three percentage points.

Osborne’s tax hike adds to changes around the tax treatment of mortgage payments on buy-to-let investments and a bank super-tax announced in July’s Summer Budget.

The stamp duty increase, from 2% to 5%, is expected to deliver £880 million in annual revenue to the exchequer by 2021.

It’s déjà vu for buy-to-let lenders OneSavings (OSB), down 7.6% to 340p, Paragon (PAG), down 4.0% to 381p and Aldermore (ADL), down 4.7% to 247p. All were among the bigger fallers in July.

'This will be a further nail in the coffin of the buy-to-let market,' says Tina Riches at accountancy Smith & Williamson.

'The Government is rightly keen to ensure that as many individuals as possible can buy their own homes, however, it is going to be difficult for those who have given up other jobs and invested in this market.'

While seeking to reign in second home ownership, Osborne extended the government’s Help to Buy Scheme in London. First-time buyers will be able to apply for a government ‘equity loan’ of up to 40% of a property’s value provided a 5% deposit is provided.

But the move had little impact on London-focused estate agent Foxton, which trades flat at 174p.  Homebuilders Barratt Developments (BDEV) and Berkeley (BKG) fell slightly during the chancellor’s speech.

Spending reductions on welfare appear to have been scrapped completely, offset by 0.5% tax on large employer payrolls and huge cuts to government departmental budgets totaling £12.2 billion annually by 2020.

Issue Date: 25 Nov 2015