A majority of buy-to-let investors are undeterred by the forthcoming stamp duty changes, new research has revealed.

 

This article indicates that the Government’s Stamp Duty changes aren’t going to deter investors, but the interest relief changes may have a larger impact.

I tend to agree with this. The lack of clarity and constant changes of what can be “claimed back” by a landlord is also very frustrating and can be offputting. I am sure there are many other changes on their way also!

Read the full article:

According to specialist lender Shawbrook, 56% of investors are planning on purchasing a buy-to-let property within the next 12 months.

Of the 44% who are not planning on purchasing a new buy-to-let property this year, just over a third (37%) said it was due to the 20% cap on tax relief, whilst almost a fifth (16%) said the 3% extra stamp duty levy on second homes was putting them off.

Shawbrook questioned over 170 property investors and found that four in 10 plan to set up a limited company for their properties to counter the impact of tax changes, whilst a third (33%) plan to raise rents.

Stamp duty will rise by 3% for landlords and second home owners from 1 April as part of the government’s efforts to dampen the buy-to-let market and free up property for first-time buyers.

Under the changes, the stamp duty on a £250,000 buy-to-let property will rise from £2,500 to £10,000, while the rate for a £400,000 property will more than double from £10,000 to £22,000. The basic rate tax relief landlords can claim on properties is also set to fall to 20% from April 2017.

Almost half (49%) of clients said they considered regulation to be the biggest over the next six months, up from 23% last year.

Despite these challenges, six in 10 investors have a positive outlook for the upcoming 12 months, predicting either a large or small increase in property value.

In total, 43% of landlords saw an increase in tenant demand in 2015 and nearly two thirds (61%) saw an increase in their rental income. A further 44% are confident that their business will grow in 2016.

Karen Bennett, sales and marketing director of commercial mortgages, said: “As a lender it is always great to see such positivity in the market, and as with our Broker Barometer conducted in late 2015, it seems that there is a lot of optimism amongst property professionals also. Obviously the new changes will have an effect and may instil more caution across the market; however, Shawbrook is well-placed to adapt to change, and we are expecting the market to remain buoyant.”

(source: whatmortgage.co.uk)

If you want to discuss the LOCAL buy to let market conditions, in and around the NP postcode, please get in touch

Phil

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