BTL investors warned of 'completion bottleneck'

BTL investors warned of 'completion bottleneck'

As buy-to-let investors rush to buy properties ahead of tax changes due in little over a month, concerns have been raised over a 'completion bottleneck'

Mortgage approvals reached their highest levels for two years in January with figures from one estate agent showing a 35% surge in buyer activity.

Data from HM Revenue and Customs however showed that the number of completed property sales failed to keep pace, falling from December to January.

Figures from the British Bankers' Association show its members approved 27% more loans in January 2016 than the same time the previous year, a rise it attributed to buyers “looking to get ahead of the increases in stamp duty for buy-to-let and second home buyers scheduled to come into effect in April”

Chancellor George Osborne announced a 3% rise in stamp duty for buy-to-let investors in November’s Autumn Statement, which has been dubbed “the buy-to-let tax”.

Ajay Jagota, founder and Managing Director of sales and lettings firm KIS, said: "The start of 2016 has seen a significant rise in mortgage borrowing and it seems perfectly reasonable to attribute that to property investors trying to get in ahead of April’s tax changes.


These changes are not insignificant and will undeniably drive up purchase costs, and are also being introduced at the same times as the scrapping of the 'wear and tear allowance' which allows landlords to claim tax relief for keeping their properties in good condition.

Anecdotally the industry is full of stories of a substantial number of homes stalled in the pre-completion stage and even a shortage of solicitors available to carrying out conveyancing. It’s clear we’re seeing something of a completion bottleneck. The real questions are whether or not buyers will persevere with the sales if their transactions are not completed when the tax changes come in. Will they take the hit, or will we see a spate of sales simply abandoned?

It’s more than likely that we will see demand from investors drop off after April, but this is unlikely to have a significant impact on the wider property market as residential buyers, particularly if first time buyers return to centre stage.”

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IrisJ.
IrisJ. 19 Jul 2017

Great advice, but may I also add that when buying an already built home, make sure you do all of the proper inspections. Most importantly pest inspection because people tend to get surprised when they

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IrisJ.
IrisJ. 17 Jul 2017

The third point is, in my opinion, the most important one. People have become too inconsiderate and careless when it comes to rented properties. If a landlord wants to protect their property, regular visits...

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cornishalan
cornishalan 10 Jul 2017

Added to the cost of purchasing these village properties are the above average maintenance costs. Particularly where the property is a listed building or requires specialist building skills such as thatching...

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Jo Mullett
Jo Mullett 07 Jul 2017

Here in Swansea, known as the Japanese knotweed capital of the UK, it never fails to amazes me that people have no idea of the potential problems this invasive non-native plant can cause when buying or...

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NathanG
NathanG 05 Jul 2017

McDonalds, for example, have been purchasing their real estate on prime locations for years. If something happens to the company they'll have invaluable assets that will be able to save them. We might

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Jonah
Jonah 04 Jul 2017

Graham: surprised to see you cite the "extra tax liability" as capping out at ?560. It doesn't - the extra tax is exponential, as it is levied on the income (i.e the inflating level of rental income you...

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Dianne Griffen
Dianne Griffen 29 Jun 2017

Be very wary of anyone bringing you deals that they have ?found? and want to ?sell on to you? or ?joint venture? with you on ? you need a proper legal contract for this, involve a RICs surveyor to confirm...

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jason hadzikostas
jason hadzikostas 28 Jun 2017

The most important thing is a budget. Students have to manage their spendings in food, house maintenance, books and many other things. According to me, student Studios are the perfect option for them as...

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SecomTech
SecomTech 22 Jun 2017

AT Last...This was discussed years ago and there was a move towards landlords registering their bad tenants on a database..(can't remember where) It seems a logical step though our leaders will probably...

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Bertrand
Bertrand 02 Jun 2017

How about the Welsh Govt introducing a scheme to protect landlords against "rogue" tenants who are then taken to court for criminal damage to the properties they trash. Pretty unlikely I suspect and politically...

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AmberMorris
AmberMorris 25 May 2017

"Please don't pick a novelty tune-playing doorbell. They're not 'fun'. They're stupid." Laughed a lot to this. It's actually true, though.

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Oliver Conway
Oliver Conway 18 May 2017

Making a neat inventory is a good idea, but if the seller is not willing to provide it, can the buyer demand it?

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