Interest in buy-to-let could plummet

first_imgHome » News » Housing Market » Interest in buy-to-let could plummet Interest in buy-to-let could plummet20th April 20160495 Views Interest in new purchases from buy-to-let investors dropped 27 per cent in March compared to the same month last year as April 1st tax change starts to bite, according to Rightmove.The fall reverses the upward trend between December and February which brought a 24 per cent year-on-year increase in buy-to-let enquiries, indicating a potential slowdown in new investor purchases at least in the short-term.Demand from home-hunters is at an all-time high with a record number of Q1 enquiries, so the pause from investors could give some first-time buyers more of an opportunity to make a move.Some buy-to-let investors took a break from looking for new properties in March as the new tax changes deadline loomed, the new data from Rightmove reveals.Whilst Rightmove recorded its busiest ever Q1 for enquiries to estate agents, the intentions of buyers shifted in March, with the number of people saying they were planning to buy a property to rent out dropping by 27 per cent compared to the same month last year. This contrasts with the increase in interest seen from investors between December and February (+24 per cent year-on-year) as they tried to make last minute purchases before April’s additional 3 per cent tax deadline.Sam Mitchell (left), Rightmove’s Head of Lettings, said that the waning of interest definitely seems to predict a slowdown in the buy-to-let market, but “what’s not yet clear is if this will only turn out to be a short-term pause. It could be that some investors are waiting until the tax changes have some time to bed in before they review their business and continue to make purchases. If this removes some of the competition for smaller properties then it could spell good news for many first-time buyers with a deposit ready as they may find now is the ideal time to make a move.”Buy-to-let investors not deterred by the tax changes and looking for the best yields could consider buying in areas in the north such as Durham and Merseyside. The top four locations for best yields are all in these counties, with Peterlee in Durham highest at 9.1 per cent, followed by Bootle in Merseyside at 8.6 per cent. In third place is the neighbouring town of Birkenhead offering a yield of 7.8 per cent and fourth is Stanley in Durham at 7.7 per cent.Sam added, “These areas where you can buy a two bed property for around £60-70k seem to offer a sound investment as long as the demand is there from tenants, so it’s worth speaking to local agents about what the rental market is like. Whilst the highest demand for rental properties is often in the South and the East of England, this quarter’s data shows demand is growing in Manchester in places like Ashton-Under-Lyne and Stalybridge so they’re worth considering this year as well.”Greater London (+1.3 per cent) and the North West (+1.1 per cent) were the strongest performing regions this quarter for rental increases, with the South East and East of England both falling by 0.1 per cent, though the East of England’s annual increase of 5.9 per cent still sees it outstrip all other regions.Rightmove April 1st tax change buy-to-let buy-to-let investors 2016-04-20The Negotiator Related articles 40% of tenants planning a move now that Covid has eased says Nationwide3rd May 2021 City dwellers most satisfied with where they live30th April 2021 First-time buyers, not Stamp Duty, now driving market says leading agency29th April 2021What’s your opinion? Cancel replyYou must be logged in to post a comment.Please note: This is a site for professional discussion. Comments will carry your full name and company.This site uses Akismet to reduce spam. Learn how your comment data is processed.last_img read more

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