Recent developments in the UK Housing market (see previous Blogs) may have a positive effect on buy to let investors.
Landlords looking to further increase their portfolios may find that the latest incentives from the UK Government may help them.
UK Landlords stand to benefit from the new stamp duty amnesty introduced by the current UK Labour Government. Buy to let investors could benefit unexpectedly from the stamp duty amnesty which is planned to effect sales of properties worth up to £175,000.
From September 3 2008, the one per cent stamp duty for any residential property under the value would be waived for a year, allowing buyers to save up to £1,750 per property. This latest measure from Labour meant approximately half of all property transactions would be free of the tax. The measure was aimed at first-time buyers, however most experts fear that first time buyers would continue to struggle with higher mortgage rates and the general reduction in availability of mortgages.
Buy to let property investors, in contrast, often boast larger slush funds, financial resources and cash deposits to draw upon. So for UK Landlords looking to extend their portfolio the prospect of buying property under the threshold becomes attractive and tax efficient.
The Labour Governments amnesty was designed to make the market more open and “fairer for all,” but as a direct result of this, some home owners looking to sell, who were stuck with properties on the housing market at £200,000 began to move their prices by £15,000 to take advantage.
Problems seem to have beset this initiative from the outset. For example we may see buy to let property investors holding back on any bids they intended to make on new property until housing prices fall further still. After all bear in mind that the government has given until September 2009 to buy qualifying property tax-free.
One thing is for sure the buy to let market for UK Landlords and UK Letting agents is expanding and this could see more rental properties coming on to the books of letting agents and managing agents alike.
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