Friday 1st April saw the new stamp duty rates become applicable on buy-to-let properties. Every property bought on a buy-to-let basis will now be subjected to a further 3% in stamp duty compared to the previous rates applicable. Previously, landlords who purchased a property worth less than Â£125,000 would not pay any stamp duty at all. Now they will pay 3%. However, this only applies after the initial Â£40,000 of the price has been taken into account. For properties worth Â£125,000 and above, the previous rate of stamp duty will be increased by 3% in each case. For example, properties worth between Â£125,000 and Â£250,000 will now incur a charge of 5% as opposed to the previous 2%. At the other end of the scale, properties worth over Â£1.5 million will see a stamp duty increase of 15%, up from 12%. Dampening down the buy-to-let market The whole idea of introducing these rules is to cool off the buy-to-let market. Many were concerned that fewer properties in general were available for sale, thanks to the number of landlords snapping up properties to rent out. The new rules have made it more challenging for landlords to buy second or third (or subsequent) properties. Other rules will also come into force. At present, for example, landlords can offset the interest they pay on their mortgage against the amount of tax they owe. This will no longer be possible from next year. Add to this the fact that the Bank of England wants to make it more difficult for landlords to even apply successfully for a mortgage in the first place, and you can see how challenging things are getting. Preventing house prices from soaring House prices will always rise and fall, and they usually do so in relation to other things going on in the market. According to reports, the Financial Policy Committee (FPC) is concerned that if buy-to-let lending was allowed to continue at current rates, it would lead to a significant increase in house prices. Since things have to balance out eventually, any future falls could be much more significant than they may otherwise be. While landlords and no doubt would-be landlords are disappointed at the new moves, and will lose out financially as a result, others looking to buy their own homes may be pleased by the changes. After all, they could potentially mean there are more available properties to choose from, as fewer properties are being snapped up by landlords. However, recent research by Nottingham Building Society indicates that only 14% of landlords have been put off buying more properties, or entering the market for the first time. It is perhaps too early to see whether this will continue, but there was certainly a rush of people looking to complete their purchases before the new stamp duty increases came into force. The reality of the increases is now upon us, which means we must wait and see whether more landlords step back from buying more properties.