Estate agents are reporting a rush of interest from property investors who want to purchase homes before the stamp duty charge on second homes is brought in on April 1st, an article from the Guardian has reported this week. From this date, anyone buying a property for more than £40,000 to let or use as a holiday home will have to pay stamp duty on the purchase at a rate 3 percentage points higher than the standard rate.
The Royal Institution of Chartered Surveyors (RICS) said in a recent report that the housing market had seen an ”unusually buoyant” December, and suggested that this was possible because investors want to try and beat the tax change. Those observing the market closely have claimed that this trend has continued into 2016.
One person who has seen this happen is Daniel Latto, whose business helps investors find and buy property, said he had seen an increase in interest from clients who wanted to make deals before the change takes place. Latto said: ”One client is looking at purchasing 10 properties at around £50,000 each outright for cash which will generate approximately £4,000 per month income for him.” He continued to say about the client: ”He’s been meaning to invest for a while, and this was the ‘trigger’ that forced his hand as it were. He has said that he is unlikely to purchase anymore in the future.”
The article also went on to mention that in the capital, Cory Askew, the area director for estate agency Chestertons, said there had been ”a huge rise in activity and offers” since George Osborne made the announcement in November. He remarked that ”December and January are not normally busy months for us – it was fairly striking the change in activity.” Clients who complete purchases on a second home or development opportunity before 1st will save in the region of £43,000.
Another person involved in the property market, Tony Lune, who owns Click Lettings and Sales, said that all of his calls are from investors looking to increase their portfolios, including a few buyers from London looking for lower prices. One bedroom properties in the capital selling for £160,000 to £170,000 that have investors completing purchases before April will see these investors only paying £4,500 in duty.
The property market has gone through a bruising time in recent years, and with more changes yet to be implemented and for us to adjust to, the market is as volatile as ever. As 2016 has just got off to a stable start, it is unsure whether this stability can hold as the year progresses.