STAMP DUTY SURCHARGE – UNFAIR AND EXTORTION!

Following on from my previous blogs I was interested to read a press release from Retties in relation to the impact that last year’s changes to LBTT (Stamp Duty) had on the £1m + market.  There was a 23% rise in £1m sales in Scotland in 2015 compared to a 5% rise in the general market.  However the interesting thing is that two-thirds of the sales occurred in the first four months of the year to beat the higher LBTT from April.

As previously indicated, my view is that the 3% surcharge will cause a very similar distortion and it will be interesting to see the stats over the next couple of months.

The Association of Taxation Technicians has released a report advising that in their opinion the stamp duty surcharge is incredibly unfair and will have an adverse impact on the very people the government claims to be helping.  They point to the fact that married couples are being treated as one unit and also that there is no exemption to deal with parents assisting young adult children getting on to the property ladder.

Let’s see what happens in the next couple of months!

Lindsay Darroch
Partner – Head of Property
www.blackadders.co.uk

PROPERTY MARKET SURGE

Further to my previous blog I can confirm that activity levels in March continue to soar. This is very much driven by the desire for property investors to complete their deals, either purchase or transfer, prior to the end of the month and the introduction of the 3% surcharge.

I still have doubts about whether this activity level will continue into April but I am pleased to report that there is a definite increase in the number of properties coming on the market and I will confirm figures to you in more detail at the start of April.

I was also very interested to see a report from the CML advising that gross mortgage lending in February hit its highest level since 2008. Also this figure was 30% higher than the corresponding February in 2015. The CML’s view is that this activity is being driven by low mortgage rates, an increasing appetite in business from lenders and also the stamp duty changes that come into force on 1 April 2016. It will be very interesting to see the levels in April and May how they compare to the year on year months. I will keep you advised of trends.

Lindsay Darroch
Partner – Head of Property
www.blackadders.co.uk  

MIXED MESSAGES FROM HOUSING MARKET

Following on from my recent blog regarding the rush of buy to let investors to purchase, I thought it would be interesting to have a look at my sense of where the housing market is going after the first two months of 2016.  Although official figures have not been released, my feeling is that new stock will be at roughly the same levels as last year or perhaps slightly down.  I think the number of transactions overall will be slightly down as for the first two months in 2016 there appeared to be a degree of uncertainty.  The March figures will be skewed with the buy to let stampede although I am watching very carefully the amount of new stock coming on to the market as I am of the view that this will be a clear sign of the market direction for 2016.  There are also a few more bumps on the road – the two main ones being the EU Referendum and global economic climate.  A blog about Brexit to follow.

Lindsay Darroch
Partner – Head of Property
www.blackadders.co.uk  

THE STORM BEFORE THE CALM?

It is very clear that government changes including the property surcharge have caused a rush of buy to let investors trying to complete deals before the end of March.  This is reinforced by a report from the Bank of England confirming that there has been an increase in the number of buy to let mortgage applications.  I myself have been involved in a number of transactions throughout the whole of Scotland with investors who are in a hurry to purchase or alternatively make changes to the structure of their property portfolio now to avoid the extra surcharge.  This is causing prices for traditional buy to let properties to go through the roof and will skew property price comparison figures for the next few months.  It will be interesting to see what impact there is on rents to make these higher prices work.  I am also concerned to see what happens come the 1st of April 2016 and I suspect that there will be a lull or plateauing in prices and activity for a couple of months.  A clear example of unforeseen  consequences! I will continue to report on trends.

Lindsay Darroch
Partner – Head of Property
www.blackadders.co.uk

FIRST TIME BUYER HITS HIGH

As readers of previous blogs know one of the stats that I am always keen to look at is the number of first time buyers in the market.  I was very interested to hear a report from the CML advising that the number of first time buyers in December increased by 18% compared to the previous year.  First time buyer numbers are now at levels not seen since 8 years ago.  The sign of a healthy market is one where the number of first time buyers is in excess of 40%.

I would warn against complacency and urge the Government to still look at schemes to continue to enable first time buyers to get on to the housing ladder.

Lindsay Darroch
Partner – Head of Property
www.blackadders.co.uk