Property investment halved since Stamp Duty rise

Property investment halved since Stamp Duty rise

The number of investment properties being bought in the UK has halved since April 2016 when an additional 3% stamp duty was put on buy to let properties and second homes, new research has found, reports PropertyWire.

But the percentage of gifted deposits rocketed immediately after the stamp duty change came into force last April and remained strong for the following six months, according to the research from mover conveyancing services firm My Home Move.

Property Trends: What to Expect In 2017

Figures dating back to 2014 show that the once buoyant investment market has halved in size since April 2016, as landlords and additional home buyers have turned their backs on paying the additional 3% stamp duty charge. This could open up significant opportunities for those investors still willing to get involved in UK property.

Doug Crawford, the firm’s chief executive officer pointed out that the extra 3% charge was introduced by the Government to stop buy to let landlords snapping up properties usually bought by first time buyers but in reality, people who buy additional homes aren’t just landlords with vast portfolios of properties, but parents looking to help their children while at university, or retirees wanting to buy themselves a holiday home.

He believes that the tax has affected individuals looking for a second property far more than landlords. “If anything, the changes have resulted in money being redirected into gifted deposits, particularly for second steppers and middle movers,” he said.

The research shows that in the months leading up to the Stamp Duty changes, gifted deposits accounted for around 8.4% of all purchase transactions but once the law changed there was an increase to around 9.3% with second steppers and middle movers becoming the largest group to benefit.

“It would appear from the data, that while investors were choosing to back off on buying additional properties, the number of gifted deposits was rising at a rate of around 1%, the equivalent of an additional 3,000 properties bought using a gifted deposit in the six months after the stamp duty change.”

“I suspect it is parents, those who ordinarily would have bought a second home, who have redirected their savings towards their children to help them onto, and up, the property ladder. The Bank of Mum and Dad has once again had to step in to help those struggling financially to move beyond their first home, a situation caused by the lack of housing stock and inflated property prices,” he added.

However, not all areas of the UK are suffering from the rise in Stamp Duty. Properties in Manchester city centre are selling 70 per cent faster this year, as the number of investors and first-time buyers climbs.

JLL says that in 2017 to date, it took an average of just nine days for a city centre property to go from being listed on the market to having a final offer agreed and conveyancers instructed – compared to 30 days in 2016.

Indeed, with schemes like Nuovo and Castlegate on JLL’s books, that demand has seen the agency complete £4.5 million worth of sales already this year.

Every third first-time buyer banks with Mum and Dad

The shift in gear is indicative of how attractive the market is right now, with both first-time buyers and buy-to-let investors able to purchase homes without being subject to the chain that usually hinders home movers and second steppers. Of the homes sold by the team in 2017 so far, meanwhile, only one has been bought at less than its asking price.

Louise Emmott, residential director at JLL, says:

“The new year often acts as a time of change for people, so we expect to see the residential market heat up around this time, but the step-change in transaction speeds which we’ve seen over the past few weeks is unprecedented. The fact that most sales are being agreed at or above the asking-price is a further sign of the huge demand in the city centre market both from owner occupiers and investors looking to capitalise on rising rent prices as city centre living continues to grow in popularity.”

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:

aerial-view-uk-houses

緊貼市場趨勢

立即登記搶先獲得最新項目及獨家物業投資機會。

我們會定期發送電子通訊,介紹最適合您的全新發布項目及獨家優惠。 我們受到超過 30,000 名活躍買家的信任,不斷更新最新英國物業市場資訊。

  • 最新發展項目及獨家優惠
  • 樓市走勢專業分析
  • 物業市場成交數據
  • 項目建築進度定期更新
UK holiday let

最新最快英國樓市新聞。

追蹤我們最新樓市觀點,爲您提供前瞻性的建議和分析。

自 2005 年成立以來,我們是英國地產市場權威,提供前瞻性的建議和分析。我們的英國物業資訊獲得 Apple News 及 Google News 授權發佈。

  • 英國樓市趨勢
  • 按揭申請攻略
  • 業主放租須知
  • 物業指南及投資建議

請即聯絡

立即聯絡我們英國物業專家查詢更多:

 

+852 6699 9008

辦公時間 9am-6pm