With the
government about to increase stamp duty levels for investors from April 2016,
it’s all gone strangely quiet in terms of investors purchasing property. There’s
a huge amount SSTC at the moment – many conveyancers are snowed under – and there’s
a big focus on getting these transactions completed this month. But in terms of
new purchases agreed, it’s private purchasers doing the buying, rather than
investors.
There has certainly been a small bubble in the first 3 months of this year, with a number of investors keen to buy before April - and this has pushed prices to record levels for freehold houses in particular. But as any sales agreed now will not complete this month, there's been a definite slowing of investor interest in the last few weeks as people take stock and wait.
Waiting
probably isn’t a bad tactic. I rather suspect that some of these SSTC deals won’t
complete (will run out of time), and for that reason at the start of April we
may see a number of properties coming back onto the market. Within that number
there should be some interesting picks for the sharp investor, even if stamp
duty then needs to be factored in.
I spoke
to an accountant the other day who said this was exactly what the government
wanted, and they had succeeded in driving new investors out of the market. I
disagree with this – changes to stamp duty have created a cut-off point with a bubble
before it and a temporary lull after it. But I haven’t spoken to a single
investor who says he or she won’t buy again – myself included. People are
simply waiting to see how the market adjusts and when it settles, which it
will, people will start buying again with the cost of stamp duty factored into
the equation.
