Will 2016 see the end of BTL? Don't count on it......

Will 2016 see the end of BTL? Don't count on it......

The property investment landscape is subject to constant change and, as a result of new legislation, some of the biggest changes ever to hit buy-to-let and auction property investors are just around the corner.

In April, the Chancellor’s stamp duty on second properties is due to kick in. But are property investors prepared? What does the news spell for buy-to-let and auction buyers? And will we see the number of bidders dropping in 2016? These are the questions that have been preoccupying industry commentators.

A recent report by the Bank of England  confirmed that buy-to-let lending is approaching its pre-crisis peak, whilst recently-released figures state that house prices have increased a whopping 10% in the year to January .

With demand outstripping supply, investors are keen to seize the opportunities, although many commentators are expecting the 3 per cent increase in stamp duty payable on a second property after April 2016 to be a deterrent.

However, following the summer and autumn statements last year, here at Together we saw a 28% increase in buy-to-let lending cases in Q4 of 2015, compared with the previous year. Auction houses have also reported significant growth in 2015 , with the anticipation that this will continue in the months ahead.

This suggests that George Osborne’s changes have, in fact, spurred property investors to enter the market before the April stamp duty hike and looks likely to continue, at least for the first quarter.


While it is possible that April might be followed by a cooling off period and a potential dip in auction bidding, we don’t envisage the measure deterring investors for long. Given the pace at which prices are currently rising, any upfront cost could be mitigated very quickly – particularly in London and the South East.

Obviously property investors and landlords will need to adjust their models to take the new stamp duty into account, but it is unlikely to stop seasoned auction house bidders from buying altogether.   

Beyond this, investors will start exploring other options. For example, we could see an increase in bidding for commercial or semi-commercial properties, as the stamp duty increase is specific only to purchases of residential property. This tactic could save savvy investors thousands upfront.

One thing is sure – Together is ready to help landlords and investors to secure properties that match their investment aspirations at auction, and 2016 looks set to be an exciting year.

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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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