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

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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Samantha Goodman
Samantha Goodman 11 Aug 2017

It depends on the people, some older adults decide to make a long-distance move in order to live closer to their children or settle in a place with a lower cost of living.

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brandonlee10
brandonlee10 24 Jul 2017

The financial ramifications of the triggering of Article 50, the starting gun for Britain's departure from the EU, are far from clear. Buyers will be most cautious in London, given that buying a home in...

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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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