It’s at this time of year that many people make plans for the future and if that involves a house move or investment in a second property, now is an ideal time to act.
We have regularly seen a spike in property browsing over Christmas which then moves into enquiries and instructions once the holiday period is over. However, stamp duty is due to rise for purchasers of second homes from 1st April of this year and as a result we anticipate this normal New Year spike to be exaggerated further as purchasers of second homes, in particular buy-to-let investors, seek to complete before the changes take effect.
This signals good news for both those looking to sell their properties, as well as for first time buyers. For the former, it is likely that the rush to buy in the first quarter will push prices up, temporarily at least, and this may be particularly the case in areas popular with buy-to-let investors.
Meanwhile, those looking to get their foot on the property ladder for the first time should find that there’s also an increase in lower end priced properties to choose from as investors decide to sell some of their properties.
Buy-to-let investments have continued to grow in popularity in recent years, helped in no small part by the relaxation of pension legislation which has seen many new property investors enter the market.
The significance that this change to stamp duty will have to these more fledgling investors in particular shouldn’t be underestimated. Purchasers of a second property worth £150,000 would, at the moment, face a tax bill of £500. From April 1st, however, this will rise to a whopping £5,000. Whilst property investment is generally a long-term commitment and charges such as this should, therefore, be viewed as a cost over the duration of the property ownership, it is understandable that the change will lead to an urgency to complete promptly – again putting sellers in a favourable position.
If you’ve considered selling your property, the first step to take is gaining an up to date valuation. You can get an idea of how much your property is worth by using our handy instant valuation tool. Alternatively for you can book an appointment for an experienced Andrews agent to visit your property and conduct a full sale or rental valuation. This appointment can also be booked online.
For investors looking to purchase further properties who are keen to avoid costly tax bills once the changes take place on April 1st, you contact your local Andrews team who are ready to provide any guidance and reassurance necessary to find the ideal property and achieve a completion early in 2016.