Rush to buy-to-let deals before crucial deadline
Property experts at a Telford law firm have seen a flurry of activity in the run-up to a controversial new stamp duty levy as landlords rushed to beat the deadline.
The residential property team from Martin-Kaye Solicitors, in Euston Way, said buy-to-let landlords now faced paying an extra 3% in stamp duty on property purchases after the new rules were introduced earlier this month.
And Nita Patel, who is a partner with the firm and leads the property team, said they had seen a marked increase in the last few weeks in the number of landlords hurrying to complete their purchases before the cut-off point.
“We saw a real increase in the number of completions in the weeks leading up to the deadline, and this flurry of activity has since been followed by a distinct lull in the property market after the new changes came in.
“Our department is always busy – in fact we’ve had some of our most successful months in business yet in the last 12 months – but the introduction of the new levy caused a real surge in business.”
Nita said it was too early to say how the changes to the stamp duty rules would affect the property market moving forward.
“The rush before the deadline has now slowed significantly and we’ve seen a definite lull in transactions since the change in legislation.
“This could of course be good news for first-time buyers, as there may be less competition when it comes to buying certain types of property that would otherwise have been the target for investors.
“So for now, first-time buyers could find it’s an excellent time to get onto the property ladder, as properties that would have previously been snapped up by buy-to-let owners may stay on the market a little longer than usual.”
Nita said in the longer term, the changes could have a very positive effect, but not immediately.
“If the new levy reduces the number of buy-to-let properties being bought up, there will be less supply, and as there’s likely to be an ever-increasing demand in the rental sector, rent increases are no doubt on the horizon.
“And if rents do go up, landlords will see a better return on their investment in the properties they own, so the 3% increase in stamp duty is unlikely to be such a significant factor in their financial plans.”
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