Heavy levies burst buy-to-let market
The numbers looking to sell soared by a third last month as landlords are deterred by new levies.
Buy-to-let investors accounted for 15 per cent of sales last year but demand is plunging and could hit prices.
The clampdown began with a three per cent surcharge on stamp duty for buy-to-let investors and second homeowners.
That came back in April and has pushed up the cost of the levy on a £300,000 home from £5,000 to £14,000.
Wear and tear allowances were slashed, too, and the crackdown continues next year, when higher rate tax relief on mortgage interest repayments will be phased out.
Figures from the Association of Residential Letting Agents (ARLA) show a rise in the number of landlords selling since the surcharge kicked in.
Tenants could also suffer as this cuts the supply of rental properties and forces up rents
The average ARLA member branch saw four investors look to pull from the market in April, compared to three in March, the first rise in sellers for a year.
ARLA’s managing director David Cox said the rush is over: “We expect fewer now to take on a buy-to-let in the next six months.”
Tenants could also suffer as this cuts the supply of rental properties and forces up rents.
“Supply stands at five per cent lower than April last year and continues to fall,” Cox added.
Affordability is getting stretched with first-timers paying an average of £168,656
Estate agents hope that first-time buyers will plug the gap, with sales from them jumping by about 15 per cent in April to 32,300, according to estate agents Your Move and Reeds Rains.
However, affordability is getting stretched with first-timers paying an average of £168,656.
Adrian Gill, director at Your Move, predicted a “darker long-term picture” for first-time buyers as rents rise: “Cutting landlords out of the housing market will push up rents and make it harder for first-time buyers to save a deposit.”