The race is on for BTL investors

The race is on for BTL investors

The latest Nationwide house price index has revealed a recent spike in mortgage approvals, hitting a two year high in January as BTL investors rush to complete before April. According to Nationwide, prices increased on average by 0.3% in February, while growth for the year rose to 4.8%.

Robert Gardner, Nationwide's Chief Economist, said: “The number of mortgages approved for house purchase increased sharply in January to almost 75,000, up from around 71,000 approvals in December and the highest number since January 2014.

However, much of the increase is likely to be related to the impending increase in Stamp Duty on second homes which is due to take effect in April 2016. This is likely to have brought forward a significant number of purchases, which in turn will probably result in a fall back in approvals during the spring/summer."

Jonathan Hopper, managing director of Garrington Property Finders, had this to say: "The race is on for second home and buy-to-let buyers to complete before April’s stamp duty hike. The resulting spike in demand sent the number of mortgage approvals surging in January, and has sparked high levels of competition for typical buy-to-let properties – flats and terraced houses in popular rental areas.

But while the scale and pace of buyer activity has been prodigious, price growth has remained fairly steady.

All of which begs the question – what will happen once the stamp duty scramble is over? The chronic shortage of supply is likely to continue nudging up prices, even after the pre-April stimulus fades."

Mark Posniak, Managing Director at Dragonfly Property Finance, said: "It's hard to know if the April stamp duty deadline will be a speed bump for the market or a speed boost. Demand from buy-to-let investors will fall away during March but first time buyers could arrive in numbers.
The age-old opponent of first time buyers, the landlord, has effectively been red-carded and the playing field is now theirs. As the buy-to-let purge starts in earnest, the appallingly low home ownership rate for younger people may well pick up. With Bank rate seemingly set in stone for 2016, and people confident about their jobs, demand is unlikely to wane.
Demand is also being driven by the age-old fear of being priced out of the market. It's especially pronounced in London and the South East. While February’s growth rate was benign, the market is likely to pick up in the spring and summer due to the continued imbalance between supply and demand.
The ebb and flow of the property market is difficult to predict at the best of times but with the possibility of Brexit and the April stamp duty change impacting landlords, it's bordering on the impossible."

Alex Gosling, CEO, online estate agents, added: "This could be the storm before the calm. February house price growth is being driven by the buy-to-let gold rush - investors trying to get in before the stamp duty hike. March is likely to be more of the same, as time is running out. It will be interesting to see what happens in April, which is historically a buoyant time for the housing market. We are walking into the unknown, and there's a chance that demand will drop like a stone.

But with less buy-to-let investors snapping up properties from beneath the noses of traditional home buyers, we could well see a surge in first time buyers coming to the market. Home buyer demand has always been there, but they have often struggled to compete against committed investors, many of whom can buy for cash.

Now they're fighting on a more level playing field, we could well see the drop off in investor numbers replaced by a surge in first time buyer numbers."

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Northerner 20 Oct 2016

Any views from outside the M25? No wonder politicians can't get the housing big picture when everyone seems to think that London is the yard stick, when it absolutely is not.

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Sean Lees
Sean Lees 13 Oct 2016

I think that the pest control really depends on the situation. If the tenant moved in and found an infestation that needs pest treatment service, I think it's more reasonable that the landlord should pay...

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Kevin 13 Oct 2016

Please Sian Berry Dan Wilson Craw LANDLORDS DO NOT WANT TO RAISE RENTS They are being forced to because of Section 24! An unfair, punitive tax hike that will be a disaster Green Party, Generstion...

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Fletcher88 11 Oct 2016

Absolutely agree! Moreover property prices edged up with 0.7% this month as the market recovered from the initial Brexit hit

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Gary Das
Gary Das 06 Oct 2016

A lot of lenders (especially the high-street banks and lenders people approach first) could do more to accommodate for the self-employed. It can really be a struggle, as I found out myself last year when...

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richardrawlings 04 Oct 2016

Not sure I understand this! If Basildon and Hemel rose 68% and 52% respectively, why do they not appear in the top ten list, which appears only to feature those in the minus 20's!! Is it me?

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luxus 27 Sep 2016

It can be stressful. More clarity is needed on the process, from a customer perspective and consideration should be given to using the Scandinavian model where the sales process is much quicker.

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Melissa_Green 26 Sep 2016

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Jimmy_McCoy 16 Sep 2016

I think that the main reason to buy garden purchases in last minute is because people always search for the best deal. In summer months there are abundance of seasonal goods and it means more low cost

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Jimmy_McCoy 16 Sep 2016

Buying a home often is more expensive than you expect. There are lots of hidden costs such as: stamp duty, surveys and valuations, mortgages etc. that can add more than 10% to the total bill

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Homebuyerconveyancing 15 Sep 2016

We are seeing a massive influx of Homebuyers using online Estate Agents. The winners are the online portals that still aim to manage the customer journey to homeownership. They provide a valuation service,...

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