market update april 2016

Ian Preston's property market for April 2016

Posted 08/04/2016

 My big three topics for my property market update for April have a budget theme which look at the opportunities and key changes that have been made.

1. Stamp Duty

The announcement in the budget regarding stamp duty is that not only is the 3% surcharge going to apply to all purchasers buying a second home it will also apply to commercial investors who are buying more own more than 20 properties. When the policy was first announced in the autumn these landlords were going to be excluded from this tax rise. This is no longer the case and all landlords and residential buyers, purchasing a second home are effected.

Transactional cost, not dissimilar to investing your money using an IFA who would take an initial fee so I don't expect it to have too much of an impact on our existing landlords, its just another cost that has to factored in to a buyers calculation.

2. Lifetime ISA

One really positive change, that will effect first time buyers and savers that was announced in the budget was the lifetime ISA. Our understanding of the product is that from April 2017 any saver aged between 18 and 40 will be able to invest in either a cash or stocks and shares ISA. This will form part of the increased £20,000 p.a ISA allowance and the government will top up the amount invested at a rate of 25% upto a maximum of £1000. This means that the maximum contribution of £4000 will be topped up by the government at the end of the tax year by £1000.

So imagine a couple of who are looking to make their first purchase they can both have contributions of £1000 from the government every year as long as they invest £4000 each.

I think this could be a fantastic way of parents helping children and for renters to save for a deposit. More details to follow but definitely good news for First Time Buyers who are looking to buy in 2-5 years.

Here are some links to government documents for stamp duty, the Lifetime ISA and other tax changes for landlords

3. Changes in Supply and Demand

As is normal at this time of year we are seeing more and more properties coming to the market giving buyers more choice. There is no doubt that available stock levels are still tight however we can see the balance of power shifting, slowly from sellers to buyers. The time of whacking £10,000 on top of the last sale is starting to wane in my opinion. With appropriate pricing and really proactive agent, great prices are still being achieved for both sales and rentals.

Make a plan and my advice would be to try our Property Launch calculator to see what sort of difference a really great plan can make.

Posted 20 months ago

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