In the month of December 2017, there were some 5300 mortgages granted, down some 17.2% from the month of December 2016.
Kathryn Doogue, Director of the property specialists Kirkham Legal, says “Clearly there is still some demand in the Buy-To-Let sector, but we are finding many of our Landlord clients are being particularly cautious and choosing their properties and mortgage deals carefully, and if possible not relying on mortgage lending at all, primarily because of the phasing in as from April 2017 of the changes to tax relief rules for landlords, which are making it now more difficult for profits to be made, and this situation will only become more challenging as the rules tighten gradually over the next 4 years, with the restrictions being fully implemented by the 6th April 2020. Another significant factor which is now affecting this sector are the changes to the Stamp Duty regime which were implemented in April 2016 and introduced an extra 3% in stamp duty on top of the ordinary stamp duty for anyone buying a second home or Buy-To-Let property.”
“We have also noticed an increase in the number of both amateur and professional landlords who are now selling their investment properties, and we believe that this is down to the mortgage tax relief changes as detailed above and the Bank of England interest rate increase in November 2017, which has made new mortgage deals more expensive when coming up for renewal at the expiry of a fixed term deal.The upshot of all of this is that more properties are coming onto the market, which can only be good news for those seeking to buy their first home, particularly as mortgage interest rates for domestic mortgages are still very competitive and the fact that the Stamp Duty rules changed in November 2017 meaning that first-time buyers do not pay stamp duty if the purchase price is below £300,000.”
Please feel free to contact us on 0161 393 2297 to discuss any of the issues raised above.
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