18th
Dec 2020
BTL investors snapping up properties accounted for 15% of November sales which is the highest for four years according to the latest data from a nationwide chain of agents.
The cause of this is simply down to buyers ensuring that agreements are reached in time for when the stamp duty ‘holiday’ finishes on March 31st next year.
Interestingly enough half of all landlord purchases were ‘cash deals’.
During 2020 investors will purchase around 134,000 homes which is slightly higher than 2019’s 133,000.
In November landlords paid on average £180,000 for a home which was £80,000 less than the average purchase made by owner occupiers.
If a typical BTL investor completes a purchase by the deadline then they will pay a stamp duty bill of £5,400; however any purchases made after the 31st March the typical bill will increase by £1,100 to £6,500.
It is estimated that landlords will pay £365m in stamp duty for purchases made between September and November if completed before next year’s deadline; this could rise by a further £74m if sales are not finalised until after the 31st March.
There was a higher percentage of home sales across the Midlands and the North West of which 22% in the West Midlands were purchased by BTL investors, with 18% in the North East and North West.
Despite the fall in BTL purchases in London in recent times, 15% of residential properties were snapped up by investors.
A spokesperson for the agents said: “Just like in the months leading up to the introduction of the three per cent second home surcharge back in 2016, landlords have rushed to take advantage of reduced stamp duty bills” notes Aneisha Beveridge, head of research at Hamptons.
“But the difference between today and 2016 is that the stamp duty cliff edge is around five times smaller, meaning the financial impact of missing the deadline is reduced.
“With over half of investor purchases made in cash during November, those taking advantage of the holiday are disproportionately larger investors expanding portfolios rather than new investors starting out. And with landlords also making up a rising proportion of sellers, in many cases, larger landlords are buying homes from smaller landlords."
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