Friday 4 March 2016

Beat the April Stamp Duty Deadline!


Since the Government’s announcement of an increase in stamp duty for second homes there has been a plethora of articles published around the whole subject of Buy to Let [BTL].  Some have been predicting a rush to purchase before April this year to avoid the extra 3% stamp duty, and others have been suggesting that with interest rises down the line and other significant changes to tax relief, that investors will start selling up as the whole BTL edifice tumbles down.  As always, extremes make headlines and the most likely scenario is probably to be found somewhere in the middle.  

Most sensible BTL investors treat their properties as a long term investment and will not be swayed by short term market fluctuations and they are much more resilient to interest rate rises than perhaps people think.  There will be a number of `so called’ accidental landlords who may decide to sell up but in a recent survey published by YouGov, 75% of those surveyed said an increase of at least 1.5% in the base rate would not affect their ability to pay their mortgage.  In respect of the future tax changes Bob Pannell, CML chief economist, said ‘Landlords should be able to mitigate the direct financial impact in a number of ways. Indeed, the YouGov research corroborates our view that the overall impact will be to lift rents higher and to narrow the availability of homes in the private rented sector’.

With the first 2 months of 2016 now behind us we have found the market remains buoyant and we have seen no early sign of BTL investors selling up, indeed the reverse seems to be true with serious investors continuing to look and acquire more property.  According to Capricorn Financial, Buy to Let rates remain competitive with two year fixed rates starting from as little as 1.99% [
advice@capricornfinancial.co.uk].

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