Stamp duty rise comes into effect as estate agents’ phones fall silent
With the cost of stamp duty across the UK rising from 1 April, estate agents have enjoyed a record first quarter – but now that the deadline has passed, the market may be facing a slump.
When George Osborne announced plans to increase stamp duty for those purchasing a second property through buy-to-let mortgages, many of the UK’s landlords were up in arms at the prospect of a 3% increase in cost for each investment. Many simply decided to leave the market rather than see their profits fall, while others rushed to buy up as many properties as possible before the April 1 deadline arrived.
As a result, estate agents and conveyancers alike have enjoyed excellent first quarter profits in 2016, with some companies opening additional phone lines and working longer hours to cope with the demand. However, many UK house buying experts within the industry have anticipated a major slump for the rest of the year now that the hike has come into effect – and there are already signs that their prediction may be coming true.
Some estate agents believe that due to the purchasing frenzy, the months ahead will prove especially troublesome. “We don’t really know how the market will adjust,” said Jonathan Cunliffe, head of the Cornwall office of the estate agent Savills. “A lot of the deals we would have done in April and May we have done in the first quarter.”
Meanwhile, many landlords believe the knock-on effects from stamp-duty hike would be felt through the entirety of the property market, with private renters expected to bear the brunt of the extra costs as landlords struggle to protect their investments; and the availability of rented properties decreases.
For those looking for a fast house sale during spring or summer, these latest changes could heavily affect the length of the selling process, or possibly force them to reduce their asking price to attract buyers. But property buying companies are still purchasing private homes for cash at competitive prices – an attractive option for those who are in a rush to sell.
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