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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Latest Comments

Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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sean benton
sean benton 01 Sep 2017

Identity theft is a thread for any profession. So,people should stay alarmed. I once take help from a letting agent and came to know that letting agents are taking every precaution to prevent fraudulent...

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Mark N.
Mark N. 30 Aug 2017

We have seen a surge in instructions over August and that should continue into September too.

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Chris
Chris 30 Aug 2017

Unfortunately, all the legislation bears its force on Landlords and ignores, naively, the effect of Rogue Tenants on the ability of landlords to keep houses in repair and offer properties for rent at reasonable...

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Christian Donovan
Christian Donovan 18 Aug 2017

The write-down on house values, combined with the fall in the GBP saddled the fund?s property portfolio with a 1.4% loss in the second quarter. The shocking amount of $240 million.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

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