New instructions for the purchasing of property grew in January according to Royal Institution of Chartered Surveyors
The latest survey from the Royal Institution of Chartered Surveyors has stated that although January saw and increase in supply of properties for sale, the rush by landlords to buy properties before the April stamp duty increase of 3% on second properties.
“How the tax changes planned for the buy to let sector over the next few years plays out remains to be seen, but there are concerns raised in the survey that existing landlords will look to either gradually scale back on their portfolios or exit the market altogether as the more penal regime begins to bite,” said Simon Rubinsohn, RICS chief economist.
“Against this backdrop, it is perhaps not surprising that our key indicators point to further rent, as well as house price increases.”
Steve Bolton, founder of Platinum Property Partners, pointed out that those investors who succeed in buying ahead of the changes will save a significant amount but as stamp duty is paid upon completion, the clock is ticking for landlords who haven’t yet pinned down an investment property.
‘This short-term boost in activity won’t do anything to alleviate rising property prices. Despite being introduced to help first time buyers, the change is likely to do the opposite as house prices rise in response to strengthened demand,’ he said.
‘Thanks to punitive tax measures planned by the Government, long term buy to let activity is set to fall. Half of surveyors believe the changes to mortgage tax relief will result in an outflow of landlords from the buy to let market, as many will struggle to maintain a profit. Yet not all landlords will suffer: despite insisting the changes will level the playing field for all buyers, the Government has decided to exclude corporate wealthy landlords,’ he explained.
‘This is undemocratic, unfair and we believe unlawful. It is for this reason that I am currently co-leading a legal challenge to overturn the tax changes. We have received considerable support from both individual landlords and industry bodies, making it clear that many landlords agree the tax changes pose a serious threat to the future of the buy to let market,’ he added.