Buy-to-let property market 'has recovered after stamp duty hike'
Interest in the buy-to-let property market from investors has bounced back following a stamp duty hike for the sector in April, according to a property website.
Rightmove said the number of number of inquiries from landlords and investors about buy-to-let property purchases was up by nearly a third (30%) in September compared with May.
On April 1, a three percentage point stamp duty increase came into force for people buying second homes, including buy-to-let properties, in England, Wales and Northern Ireland. Stamp duty has been abolished in Scotland, but a similar tax increase came into force to mirror the changes in the rest of the UK.
Estate agents reported a rush of buy-to-let investors snapping up properties ahead of the April 1 tax increase, and reports have suggested interest in the market slipping back immediately after it came into force.
Rightmove's head of lettings Sam Mitchell said: "Investor activity has bounced back following the stamp duty changes, though some agents report that many investors are looking to knock sellers down on their asking prices to make up for the additional stamp duty they now need to pay."
The website also said many seaside town home purchases were paying off for investors looking outside London.
Rightmove said properties in St Leonards-on-Sea, in East Sussex, and Clacton-on-Sea and Westcliff-on-Sea, both in Essex, tended to be making particularly strong returns for those who made last-minute purchases before April 1, taking into account house price rises in recent months as well as the rents landlords can typically expect to make in these areas.
For example, in the first quarter of 2016, the average price tag on a home in Westcliff-on-Sea was £203,860, but by the third quarter of this year it had increased by nearly £20,000 to reach £223,268.
Mr Mitchell said: " Essex and other commuter spots are offering investors the best total returns, and those looking at long-term investments are seeking out areas with upcoming improved transport links."