There’s a whole legion of wannabe Cwmbran first-time buyers keen to get on the property ladder and they now have a 3% price advantage over the previously quicker responding army of Cwmbran landlords with cash at the ready.
Since the start of April, buy to let landlords have had to pay an additional 3% stamp duty so whilst demand from some Cwmbran buy to let landlords has dropped away,
in the interim, it offers Cwmbran first time buyers (FTB’s) a chance to fill the vacuum with less competition from cash rich landlords (over two thirds of BTL properties were purchased without a mortgage in the last 7 years) who could bid more and complete quicker.
Over the last 12 months, £61,150,332 has been spent buying 422 Cwmbran properties.
Looking at the average value of a terraced house in Cwmbran currently standing at £109,900, that means if our Cwmbran FTB went up against a Cwmbran landlord, the landlord would have to pay an additional £3,297 in stamp duty. Early anecdotal evidence from fellow property professionals in the town is suggesting landlords are reducing their offers slightly on Cwmbran properties to reflect the extra stamp duty.
Whilst on the face of it, it appears landlords are being punished by No.11 Downing Street, I actually believe this increase in stamp duty for landlords is a good thing for the Cwmbran property market as a whole.
Since 2011/12, the Cwmbran property market has performed very well indeed. Over the last 12 months, £61,150,332 has been spent buying 422 Cwmbran properties. Figures from the Land Registry have just been released and month on month in our council area, property values are 2.1% higher, yet 2.7% higher year on year. These figures are nowhere near the heady days of 2004 (June to be exact), when Cwmbran property prices rose by 28% in 12 months.
So as property values in Cwmbran (and the UK as whole) start to stabilise and come back to some kind of balance, I am beginning to see savvy landlords view the Cwmbran
property market in a different light. Even with the Spring rush, gone are the days where you could make limitless money on anything that had a door, a few windows and roof. This stamp duty change has made more and more landlords, after reading the NP Property Blog www.nppropertyblog.co.uk take advice on what or not to buy and what to pay, meaning Cwmbran landlords are being more calculated with their Cwmbran BTL purchases. I am also seeing a variance between relatively brisk current price momentum and softer expectations in terms of property value growth in Cwmbran, this in part reflects amplified uncertainty about the short term economic outlook
(eg Brexit, Issues in the Far East etc).
Now I know a lot of Cwmbran landlords brought forward their BTL purchases to beat the stamp duty deadline. However, it
is probable that hunger from Cwmbran investors will return for the right Cwmbran property later in the year, especially
if it’s at the right price and offers a decent yield. However, in the meantime, Cwmbran FTB’s could and should, in the short term, make hay whilst the sun shines plug the gap and grab a bargain!
Remember if you have any property or finance queries I’m here to offer impartial advice.