Yesterday the government announced that stamp duty will indeed come back into full effect after its holiday period draws to a close in September 2021. This has been anticipated by many, and buy-to-let investors will now be aiming to make the very most of the time they have left to capitalise on the scheme while it lasts so we expect a race to the finish line to get transactions through before it ends.
Now, let’s take a look at all the headlines that caught our attention this week. I always try to summarise the links to save you having to click through.
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Property news this week
- Home-mover activity outpaces first-time buyers in Q1 – UK Finance, reports that homemover activity in Q1 has increased by 82% when compared to the same period last year. Homemoving has become more prevalent in all regions than FTB, suggesting that homeowners have been making the most of the Stamp Duty holiday. The BTL market has also experienced significant growth in this time, which is predicted to level out with the return of Stamp Duty. In comparison to January 2020, refinancing also increased in January 2021, perhaps due to the effects of the second lockdown. Again, we are seeing the demand and activity in the market along with people capitalising on the low interest rates currently on offer.
- Best Postcodes in London for Buy-to-Let Yields – PropTech firm Home Made has analysed data from thousands of property listings all across London and put together an up-to-date guide on buy-to-let rental yields for investors in the capital. Overall, data suggest that postcodes located farthest from the city centre are currently offering the best yields, with areas such as Barking and Dagenham, Redbridge, and Havering offering some of the best returns. The delayed Elizabeth Line has finally been scheduled for 2022, which will greatly benefit the suburban areas of East London and investors will expect to see an even greater increase in rental yield value for properties in these areas. Ambitious redevelopment plans underway in the east, particularly in Havering, are set to have a similar impact on rental yield. So if you are an investor still focusing on London then the areas in this article are where you may want to focus.
- UK Recovery Gathers Momentum – The UK rental market appears to be heading strongly into recovery, as other international markets such as those of China and Canada demonstrate a similar trend. UK properties are demonstrating a high level of appeal for many overseas investors; French investors increased spending in the UK property market by 71% in 2020, year on year. Even the student market has seen an increase in enquiries, which bodes very well for its recovery after Covid-19 and Brexit influenced the sector. The increased interest in distressed or unwanted retail assets is also proving attractive to international investors who are looking to get a good deal.
- Government rejects calls to make stamp duty cut permanent – A document published yesterday addresses the call to abolish stamp duty permanently. The government response has unequivocally quashed this as a viable option for the foreseeable future, stating the importance of Stamp Duty in helping to re-stabilise society in the wake of the Covid-19 crisis. As a critical source of funding, the government have stated that Stamp Duty is needed to “pay for the essential services the government provides.” Well, that has burst the bubble for the people hopeful we might see it abolished or cut. I have said all along that Stamp Duty makes far too much money for the government meaning the chances of it going are very slim.
That is all we have for you this week. If you have any comments or questions on this week’s news summary then please feel free to send us an email at [email protected] – if not, see you next week.