April 19, 2016
What’s going on in the London property market and how could it affect you?
Market News: Stamp duty furore now behind us as we look forward to mayoral election
The controversial stamp duty surcharge is now official. Since April 1, purchasers of buy-to-let properties and second homes have had to pay an additional 3% in stamp duty land tax.
In the lead up to April 1, a glut of reports suggested there had been a surge in demand for homes from property investors and a number of conveyancing firms have since reported that March 31 was a record day for transactions.
Many industry commentators expect the buy-to-let market to cool down from now as the dust settles on the new legislation.
If you’re selling your home or thinking of coming to market, the drop-off in interest from landlords and investors needn’t be an issue.
It’s widely thought that first-time buyers will now take centre stage and the figures seem to back this up.
According to the Council of Mortgage Lenders, in February there were 11% more loans granted for first-time buyer mortgages than in the same month last year.
What’s more, last month’s Budget again contained good news for those looking to take their first steps on the property ladder. As well as the Help to Buy ISA, from next April there will be a Lifetime ISA.
This ISA will allow savers to put away up to £4,000 a year and receive a Government bonus of 25% until they’re 50. If a 20 year-old took out a Lifetime ISA and saved the maximum amount each year, they could have earnt an additional £30,000 from the Government by the time they hit 50.
We are also eagerly awaiting next month’s London mayoral election, which has been described by one of the candidates as a ‘referendum on housing’.
The Labour Party candidate is Sadiq Khan and Zac Goldsmith is running for the Conservatives.
Meanwhile, the Lib Dems are represented by Caroline Pidgeon, the Greens by Siân Berry and UKIP by Peter Whittle.
Sales update: Prices continue to rise but there’s still bargains to be had
As you might expect, house prices in the capital have continued to grow at a good pace in the past few months.
The latest official figures from the Office for National Statistics show that in the year to February, house price growth stood at 9.7% in London. To put that into perspective, the average for England was recorded at 8.2%.
Continued house price growth is great news for property sellers – particularly owner-occupiers who are selling up after a long time in the same home.
However, if you’re selling and buying a property elsewhere in the capital – or purchasing your first home – there’s no need to feel that you’re destined to be priced out of the market.
There are still some fantastic properties available at eye-catching prices.
Lettings update: Tenant demand still highest in the capital as rents reach record highs
London’s rental market has continued to outshine those in other parts of the country in recent weeks.
The latest data from Rightmove shows that in Q1 2016 Greater London was the strongest performing region in the UK, recording quarterly rental growth of 1.3%.
The portal also suggests that demand for rental property among tenants remains highest in South East London.
This is promising for London landlords as it means their chances of encountering void periods are minimised.
According to HomeLet, high tenant demand is also causing rental prices to increase, with the average monthly rent in the capital now over £1,500.
That’s it for this month. For any advice on buying and selling property in London you can contact Atkinson McLeod here.
And you can find out how much your property could be worth using our instant online valuation tool.