I appreciate that this is a topic which has been talked about quite broadly since George Osborne’s autumn statement end of last year and the media has put a rather negative spin on things. However is it really the worst thing to happen in the world of buy to let investment in the Selby property market?
According to the Rightmove housing index, the average house price in Greater London at the end of last year was £616,548 and in Yorkshire & the Humber £166,060. Comparatively the additional stamp duty charged equates to £39,323.84 in London vs £5,803 in Yorkshire (areas such as Selby), a significant difference.
With the above in mind one might expect property investors, in an effort to mitigate their initial stamp duty outlay, to invest outside of the nation’s capital instead. What does this mean for Selby properties? Surely an increase in capital growth? Furthermore, with a 3-4% increase in capital appreciation, for example, this more or less negates the initial sting faced by investors of this new change. Consequently this works out nicely with Mr Osborne’s vision of the ‘Northern Powerhouse’.
One factor that could adversely affect all of the above is uncertainty in the market. However speaking with landlords, my experience is that they view property as a long-term investment (between 20-30 years) and quite rightly so. Therefore, although they may have to pay out more at the beginning, with some careful planning and execution, they can be sure to make their money back in the end.
As for the buy to sell property market, the ability to offset the additional stamp duty charged against any capital gains tax ensures property refurbishments remain lucrative (again subject to careful planning and execution).
But what issues can Selby landlords expect of the stamp duty changes and what other factors do investors in this area need to consider? Later, I’ll be back to explain.
[end of Part one]
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