Spring Budget Reaction

Whilst we are not surprised that the Chancellor failed to reverse the additional 3% SDLT on second home purchases nor reinstate the mortgage interest tax relief for buy-to-let landlords in today’s Budget, we hope that this will be considered in future as it has dramatically reduced the number of small/individual buy-to-let investors. Many have been deterred from investing, and the looming ban on estate agent’s fees to tenants is likely to lead to another charge being pushed towards landlords.

We’re also currently discussing the effects of ATED (Annual Tax on Enveloped Dwellings) with a number of landlords, most of whom are looking to offload their investment properties with a view to taking their money out of the UK. Most of these landlords had bought property using a Special Purpose Vehicle (SPV). Capital growth is down, and investors are no longer willing to ride out the storm, particularly whilst paying higher tax rates. However, there is currently strong demand from first-time buyers with plenty in the market looking to purchase property up to £2m, so now is a good time for those investors who have made capital gains to exit.

I do think we will see more institutional investor landlords coming into the market from overseas, particularly with the weaker pound which has seen more US dollars and euros coming into the UK. However, these institutional buyers are looking for large discounts of up to 20%. The upcoming elections in Holland and France may see a more right-wing regime for both countries. If this does happen, it could well push the euro down which will mean investors trying to negotiate prices down as a result.”

For more information on Red, please visit www.redpropertypartnership.co.uk or contact 0207 485 1332 for more information.

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Red Property Partnership

Red Property Partnership provides a comprehensive Sales, Letting & Property Management service throughout Central London and surrounding areas. With extensive experience of the Sales & Letting throughout Central London, we have developed a strong knowledge of the local property market enabling us to offer a wide-ranging service that is friendly, honest and professional. We are committed to providing our clients with individual high quality advice based on the wealth of experience of our experienced team. With all the traditional values you would expect from a well-established firm combined with the latest innovations and technology, we offer a modern quality service. Our philosophy is simple, to offer a professional, reliable, honest service at all times. The way a partnership should be.