Buy-to-let sees demand spike due to stamp duty holiday

July 24, 2020

Homebuyers and investors alike were taken by surprise when Chancellor of the Exchequer Rishi Sunak announced that a stamp duty ‘holiday’ would run from 8 July 2020 to 31 March 2021 as part of his summer statement. During that time, no stamp duty will be levied on the first £500,000 of all property sales in England and Northern Ireland. 

The change means that buy-to-let investors will have to pay just 3% stamp duty if they buy a property for £500,000 or less (this 3% being the second home surcharge that was already in place and which remains in place during the stamp duty holiday period).  

The chance to make a saving of up to £15,000 is spurring many existing and would-be landlords into action. At Fabrik Invest, we’re seen increased traffic as a result of the Chancellor’s announcement, with investors keen to benefit from the potential saving. At the same time, one of our developer partners recorded an increase in sales activity of over 50%. Clearly, the stamp duty holiday is spurring a spike in demand for buy-to-let accommodation. 

The taxation holiday is a move that many property companies support. The industry has been calling for a stamp duty shakeup for some time to encourage people to buy, with organisations such as the Royal Institute for Chartered Surveyors and the National Federation for Builders speaking out on the matter.

“The Chancellor has responded to lobbying by key players in the property industry by introducing a stamp duty holiday until March 2021. Intended to support the housing market to weather the impact of COIVD-19, the move will provide a boost for investors as well as owner-occupiers, leading many to take advantage of the significant savings that are currently available.”

Dale Anderson, Managing Director, Fabrik Invest

In every UK city, the price of the average property falls below the new £500,000 stamp duty threshold, according to the hometrack UK House Price Index for May 2020. Indeed, in investment hotspots such as Liverpool, Manchester and Birmingham, the average property is priced at well under £200,000. This means that even higher end investment properties can be snapped up without incurring any stamp duty beyond the 3% levy that all buy-to-let investors must pay. 

Many investors have been quietly preparing to take advantage of just such a situation, anticipating that the time would come when they would need to move quickly.

“We know property investors have been remortgaging with a view to picking up some bargains. Owner occupiers have not been doing the same. Landlords have been preparing since the start of the lockdown, remortgaging to enlarge potential war chests with an eye on bagging bargains in the future.”

Steve Olejnik, Managing Director, Mortgages for Business

According to Really Moving, the time to act is very much now. The company’s research has led it to project a 1.4% dip in house prices in August, followed by a rebound of 4.7% in September. If the figures play out, there is a window for investors to buy during the dip and then quickly see their capital appreciate over the following weeks, as well as for them to save on the cost of stamp duty. 

Given all of this, it is no wonder that many buy-to-let investors are choosing now to add to their portfolios. If you are one of them, why not get in touch with the Fabrik Invest team? You can call us on 020 8175 9891, email enquiries@fabrikpropertygroup.com or visit www.fabrikinvest.com

Share This Post:

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

Wayne Venter

International Business Development Manager

Wayne has been in the property industry for over 17 years. He started out selling residential properties in the northern suburbs of Sandton, South Africa, for one of the bigger real estate brands, before moving to a boutique, Johannesburg-based property developer. He worked at a senior level, specialising in residential developments on the north coast of KZN and various other areas of Northern Johannesburg.

Wayne moved to selling luxury, free standing homes and apartments in Sandton, Johannesburg in 2006, having joined the Country’s leading real estate brand and within six months was leading the team. In 2008, he began to focus exclusively on the luxury apartments in central Sandton, priced from approximately R2 million to R60 million. Over the years, he has also added commercial property sales and rentals to his repertoire, as well as building his own investment property portfolio between 2011 and 2018.

By 2018, realising where the South African property market was headed, he sold out of his investment property portfolio to de-risk and went looking for a real estate company to buy into. South Africa’s property market was extremely volatile at that time, so Wayne took the initiative and moved to London to work in property in the UK.

Join our newsletter

Get all the latest news from Fabrik Invest.

Edward Snell

Senior Property Consultant

I live in Spanish countryside with my wife and our 11 rescue dogs.

Originally from Bedford, I have two sons, two step children & 6 grandchildren.

I have a keen interest in property investment and over the years have built up a personal portfolio for the purposes of rental income and capital growth.

I have over 20 years’ experience in property investment, both in the UK & overseas.

My other interests include animal welfare, football, motorsports, travel and music

My personality is of an even temperament and I enjoy the cut and thrust of doing deals.
I am happy and successful in what I do & take great pleasure in providing my clients with successful outcomes.

I’m a good team player but work well as an individual.

Daniel Harburn

Property Sales Consultant

Daniel had a passion for property from a young age so he began his working life by undertaking a plumbing apprenticeship for a large well known UK developer to pursue a career in construction. After qualifying he soon realised that building relationships was a preferred skill of his due to his loyal and trusting nature.

From then on Daniel launched his career in sales where he worked his way to to a high performing sales person at a creative media company. Part of Daniels success in accumulating clients over the last 10 years is put down to his diligence in customer experience.

Daniel has a keen interest in golf and also in keeping himself fit which is essential as he and his fiancé have 4 year old twins, Jacob and Sofia who keep them both on their toes.

Contact Us

Download Our Free UK Property Guide

Thank you!

We will be in touch.