A three per cent rise in stamp duty for buy-to-let properties at the start of April has failed to deter Staffordshire property investors.
The extra three percentage points on these sales has added £6,000 to the cost of buying a £200,000 property, and nationally led to a surge of buy-to-let investors bringing forward purchases to complete ahead of the new regime.
The Office for National Statistics has also reported an increase in property prices, and said that if London and the South East of England are taken out of the figures UK property prices have increased by 5.1 per cent.
Graham Elliott, conveyancing manager at Staffordshire solicitors Bowcock & Pursaill, who have offices in Leek, Uttoxeter, Eccleshall and Hanley, confirmed that across the county they have seen a steady increase in property values and activity.
He said: “Sales across all sectors are very busy at the moment, from residential through to commercial property, commercial leases and agricultural land, and we certainly appear to be busier than this time last year.
“Locally we have seen a steady increase in property values, and where I live in Ashbourne we have seen about a 10-20% increase in prices in the bottom and middle range properties.
“As it’s a steady increase hopefully this is a good sign as prices regionally are likely to be more sustainable long term.”
As buy-to-let investors have rushed to beat the stamp duty hike, this has had a knock-on effect of energising the middle sector of the market, with an increased demand for bigger properties from second-steppers.
He added: “In the residential market movement is now greatest in the middle market, which is good news as it means chains are moving again.”
However, despite national predictions of a slowdown now in the buy-to-let market following the ‘rush’, the Staffordshire law firm says this has not been the case locally.
“This has been the most surprising aspect,” he said, “as clients across all of our offices appear to be taking a very pragmatic view of the stamp duty increase and it doesn’t appear to be significantly affecting the buy-to-let market.
“Like everyone else we experienced a rush of purchases before the stamp duty deadline as people tried to avoid the higher rates, but we expected this would then be followed by a quieter period.
“However, investors are largely factoring it into their investment costs because they feel property still delivers the best return on investment while pensions and savings rates remain poor.
“This isn’t the case in the South East where house prices are higher overall and eating into their return by tens of thousands of pounds rather than thousands of pounds as experienced in Staffordshire as there’s a lower base level here.”
As the May Bank Holidays approach the law firm expects conveyancing work to increase, as homebuyers push to move into their new homes and use the extra day off work to unpack and settle into their property.
Graham added: “There seems to be a strong demand for all sizes and types of rental property at the moment, however if anyone is considering becoming a landlord make sure you do your research.
“Selecting the right area and buying for the right price is absolutely key, and you must be prepared to walk away if this isn’t possible as buy-to-let has to be a hard-headed financial decision.”
Anyone interested in legal advice on buy-to-let, buying or selling a property can contact Graham Elliott on 01889 598888 or email him at firstname.lastname@example.org