2016, Major Changes and Success in the Property Market
A wise owl watches for opportunities in the darkness of night, a little like our property teams who keep a sharp eye for opportunities for our clients. We all know what an eventful twelve months it has been with Brexit and the higher rate Stamp Duty levy, these are the two major changes we have been forced to contend with.
However from our perspective and notwithstanding the above, we have enjoyed a record breaking year in our auction department with 4 of the five auctions we have held actually taking place after the higher rate Stamp Duty tax became applicable, with each and every one of them being hugely successful and two having completely sold out!
Let’s face it, if you are a seasoned buy to let property investor then the introduction of the higher rate SDLT is not going to suddenly make you consider selling up, paying an enormous amount of Capital Gains Tax and leaving all of your money lying wastefully in the bank earning a very inconsequential amount of interest. Instead it has become just another ‘bill’ the government deem it necessary for those providing homes for the rental market to have to suffer whereupon investors really are tending to look at the bigger picture that the property they are purchasing will provide for not only capital growth but also a meaningful and often substantial income at the same time.
Unlike London, down here on the south coast of England and particularly in East & West Sussex, we sell local properties to local buyers whose money is already in this country so the value of the pound against exchange rates does not feature within the equation. Of course in London the opposite is prevalent whereupon it matters greatly to overseas investors where multi million pound investments are being purchased and this is why the property market in the capital has struggled this year which is in stark contrast to the success we have enjoyed during the same period.
This year we have also seen the emergence of the first time auction buyer, a one off purchaser who has perhaps been left an amount of money and are not willing to accept the paltry amount of interest their bank are offering. A case in point being the buyers of a recent auction lot who in their own words are ‘not property people’ but had circa £300,000 in their bank account. With their money withdrawn and ready to spend, for less than this figure, they purchased a property that produced an income of just under £30,000 per year. After the auction I congratulated them on their purchase whereupon they explained that for them, it was absolutely worth payer the additional SDLT as part of their one and only purchase as they were looking at the aforementioned bigger picture, the high level of income and anticipated capital appreciation over a period of time. They walked away from the auction very happy with their purchase, so much so that I think we are going to see a few more of these buyers during 2017.
Contact Simon Caplin, Senior Auctioneer who is happy to answer any questions email@example.com 01273 274010