Surge in buy-to-let purchases ahead of levy hike
INVESTORS across the north are said to be in a rush to purchase buy-to-let properties before an additional 3 per cent of stamp duty is introduced for additional homes.
The increased levy is to due to apply from April 1.
It will impact anyone buying an additional residential property in the UK worth more than 40,000, and could cost potential landlords thousands of pounds in extra charges.
Estate agency Templeton Robinson said it had seen a "surge to complete property purchases in the rental sector" ahead of the end of the financial year.
Company director Neil Templeton said traditional areas of high rental demand in Belfast such as the Holylands, Donegal Road and Lisburn Road in particular were seeing increased activity.
“A buyer paying, say, £135,000 for a buy-to-let property will only pay £200 before April 1, but £4,250 afterwards. This increase is equivalent to the cost of a new kitchen or possibly six months rental income, and could well result in a 'spike' in transactions on holiday homes and investment properties over the next month or so as people try and complete under the old system.
“In the longer term, after an initial lull and bedding-in period, we would expect to see a stabilisation in these residential sectors. However, it remains to be seen if this tax hike will have an adverse effect in popular areas for the rental and second or holiday home markets.”
Although there are some weeks left before the changes are implemented, many investors are rushing to finalise terms due to the average turn around time on purchases.
“We are finding it is currently taking an average of around eight weeks to complete a purchase from the date a sale is agreed," said Mr Templeton.
"Some lenders are quicker than others though, but a word of warning that there do tend to be a few more hoops to jump through with buy-to-let mortgage applications than residential ones.
"On the other hand, cash transactions with vacant possession can complete as quickly as four weeks if you have an efficient solicitor and estate agent at the helm.”