The buy-to-let market is awash with investors looking for an attractive project before the new stamp duty regulations come into effect this spring.
Leaders branches across the UK have reported a sharp increase in prospective landlords looking for a buy-to-let property that will deliver a healthy yield and strong prospects for capital growth. From 1st April, investors will have to pay an additional three per cent stamp duty on all property purchases.
Despite the imminent stamp duty increase, the appeal of buy-to-let remains strong, with investors knowing they can achieve a sizeable return.
Indeed, the recent Property Partner Residential Market Index revealed residential property has delivered an annual growth of nine per cent over the last 20 years, massively outperforming other major asset classes.
It also found that property has proved to be an incredibly safe investment type over the years, even in comparison with commodities such as gold.
Although returns are likely to remain strong in the face of continuing high tenant demand, they will be affected by the initial cost of buying-to-let once the stamp duty changes kick in, so it is important for investors to act now.
From 1st April, buy-to-let investors will pay stamp duty at the following rates:
- Up to £40,000 - 0%
- From £40,001 to £125,000 - 3%
- From £125,001 to £250,000 - 5%
- From £250,001 to £925,000 - 8%
- From £925,001 to £1,500,000 - 13%
- Over £1,500,000 - 15%
It means a property sold for £150,000, which currently attracts a stamp duty fee of £500, will require an investor to pay £3,800. Alternatively, those spending £275,000 on a property will need to pay £10,800 on stamp duty, up from the current level of £3,750.
The good news is there is still time to identify a shrewd investment opportunity and to complete a purchase before the stamp duty changes. But there is no doubt investors need to be quick!
On average, it takes between 10 and 16 weeks to buy a property, so moving fast is a must for anybody looking to buy-to-let while still paying the lower rate of stamp duty.
At Leaders, we have a range of specially selected investment properties available to buy and our local team will be happy to help you find the right one to meet your needs.
For more information, please contact your local branch today.