Buy-to-let landlords undeterred by stamp duty surcharge

1 02 2017

Buy-to-let landlords undeterred by stamp duty surcharge

The number of second homes liable to pay stamp duty increased to 62,800 in the final quarter of last year, up from 56,200 in Q3 and 30,400 in Q2, suggesting that many people believe that investment in buy-to-let property is still worth pursuing.

The introduction of the 3% levy on stamp duty in April 2016 was expected to sound a death knell for buy-to-let property. But the fact is that many investors remain attracted by the high yields, low void periods and potential for capital appreciation that buy-to-let offers to be deterred by the introduction of the surcharge.

Instead of steering clear of the market, many buy-to-let landlords continue to add to their property portfolios, as reflected by the significant increase in the amount buy-to-let investors borrowed to invest in property towards the end of last year.

Landlords borrowed £3.2bn in November 2016, up 10% month-on-month, the Council of Mortgage Lenders (CML) said, which was the highest monthly level since the stamp duty changes on second properties were introduced last April.

The government has made £519m from the 3% surcharge on second homes in Q4 2016 – and £1.19m since Q2 2016.

As well as buy-to-let investors, the second home 3% stamp duty tax can apply to those purchasing holiday homes and parents buying for children, for example.

Commenting on the HMRC’s latest quarterly stamp duty statistics, Nick Leeming, Jackson-Stops & Staff chairman, said: “So far £1.19m worth of stamp duty receipts are estimated to be attributable to the additional 3% element payable on second homes, a significant windfall for Treasury coffers.

“Between Q2 and Q3 the number of second homes liable for the 3% surcharge nearly doubled. This increase is understandable as many buy-to-let investors would likely have rushed to make purchases before April 1st, but the number of liable second home transactions is up again in Q4 to 62,800.

“The data suggests that buy-to-let investors are not being deterred by the new tax which is supposed to be dampening demand from this group to the benefit of first-time buyers. We will see the true impact of this policy in time, but my fear is that additional costs will be passed on to tenants.

“The better solution is a real concerted drive to build more homes, rather than targeting buy-to-let investors – I hope the upcoming Housing White Paper contains a real blueprint for change in this regard.”

Email Us:
Stoke-On-Trent@BelvoirLettings.com

or Call us on 01782 478444

from landlordtoday.co.uk





HOPE FOR BETTER RENTED HOUSING IN 2017

21 01 2017

 

 Nationwide expert Belvoir views prospects with optimism for year ahead.

 

 

The Stoke office of property specialists, Belvoir, will be part of a nationwide drive to integrate the private rented sector more positively into the government’s housing plans for 2017.

Despite government changes and fresh challenges in the ‘buy-to-let’ market, the future for rented property will continue to be one of the best bets for the country’s growing number of tenants as well as landlords, says the company.

“We’re starting the new year with more optimism than we’ve had for some time,” says Alejandra, who owns the Belvoir Stoke office…

“Although the market is likely to be slowed down by the threat of stricter ‘buy-to-let’ rules – including tougher affordability checks for buy to let mortgages and the withdrawal of tax relief on mortgage interest – we are still reporting an increase in demand for houses to rent.

“If you are a cash investor, or perhaps an ‘accidental landlord’ who has inherited a property with no mortgage repayments, you can expect a very healthy return on your investment – far better than you could achieve from mainstream savings products.

“So, a priority in 2017 will be to carry on sourcing more local, good quality rental accommodation to satisfy both landlord and tenant client demand across the board.”

 





More buy-to-let landlords turn to bridging finance

18 01 2017

belvoir-bridgingfinance

The Bank of England’s decision to crack down on buy-to-let lending through the introduction of tighter borrowing rules and stricter affordability tests mean that increasing numbers of landlords are turning to less conventional forms of finance in order to carry on investing in the buy-to-let market.

According to the findings of a new Broker Sentiment Survey, conducted by bridging loan lender MTF, 84% of brokers were unable to source a buy-to-let mortgage for some of their clients in the final quarter of last year, with more than a quarter – 27% – attributing affordability as the main barrier.

One in five of the brokers surveyed said they were unable to get buy-to-let mortgages for clients with adverse credit and equally, 20% blamed consumer buy-to-let regulations.

But while buy-to-let lenders deal with the latest interventions by the Prudential Regulation Authority, business in one often-overlooked corner of the market is currently booming.

Demand for bridging loans – short-term secured loans designed to bridge a temporary cash shortfall when acquiring a property – has surged, as reflected by this latest poll.

The study found that 69% of brokers opted for bridging finance after being unable to raise a buy-to-let mortgage for their clients in instances where time is of the essence. Some 8% of brokers opted for secured loans as an alternative.

Bridging loans were once perceived as a ‘last resort’ lending option. But with a growing number of borrowers attracted to the greater flexibility offered by alternative finance providers, including no minimum term and no exit fees, it is now expanding fast, with 31% of brokers noticing a rise in bridging loan volume in Q4 2016, up from 13% in the previous quarter.

The South East saw the biggest demand for bridging loans in the UK at 50%, up from 29% in Q3.

 

written by .landlordtoday.co.uk/

 

For Mortgage advice speak to the Belvoir Stoke team on 01782 767065 or click here: Mortgage advice 





Belvoir West Midlands Property Event

20 12 2016

Join us at the #Belvoir West Midlands Property Event
It’s a FREE event with Limited spaces 
We have Guest Speakers James Drury an Estate Agency Consultant and Kate Faulkner a Property Expert taking place on Wednesday the 8th February at The Moat House Hotel, Hanley, Stoke-on-Trent ST1 6BQ  19.00 – 21.00
Call Belvoir Stoke on 01782 478 444 or email stoke-on-trent@belvoir.co.uk to BOOK
belvoirpropertyeventlong
#Stoke #PropertyInvestors