The announcement is still subject to consultation. The consultation is due to take place over the coming weeks and should provide greater clarity before the end of 2015.
There are a number of potential impacts that this legislation is likely to have on the property market:
-Reduced competition between first-time buyers and investors for many properties, at the same time dis-incentivising some second home purchasers.
-A marginal or no direct impact on average house prices.
-Potential increase on rents as supply of rental property is contracted.
-A shift by investors (seeking to amortise higher purchase costs) to longer-term strategies.