November 6, 2016
£9,500 boost to Edgware First time buyers
There’s a whole legion of wannabe Edgware first-time buyers keen to get on the property ladder and they now have a 3% price advantage over the previously quicker responding army of Edgware landlords with cash at the ready. Since the start of April, buy to let landlords have had to pay an additional 3% stamp duty so whilst demand from some Edgware buy to let landlords has dropped away, in the interim, it offers Edgware first time buyers (FTB’s) a chance to fill the vacuum with less competition from cash rich landlords (over two thirds of BTL properties were purchased without a mortgage in the last 7 years) who could bid more and complete quicker.
Looking at the average value of an apartment in Edgware currently standing at £318,300, that means if our Edgware FTB went up against a Edgware landlord, the landlord would have to pay an additional £9,549 in stamp duty. Early antidotal evidence from fellow property professionals in the suburb is suggesting landlords are reducing their offers slightly on Edgware properties to reflect the extra stamp duty.
Whilst on the face of it, it appears landlords are being punished by No.11 Downing Street, I actually believe this increase in stamp duty for landlords is a good thing for the Edgware property market as a whole.
Since 2011/12, the Edgware property market has performed very well indeed. Over the last 12 months, £303,179,434 has been spent buying 734 Edgware properties. Figures from the Land Registry have just been released and month on month in our council area, property values are 0.3% higher, yet 11.8% higher year on year. These figures are nowhere near the heady days of 2000 (May to be exact), when Edgware property prices rose by 26.8% in 12 months.
So as property values in Edgware (and the UK as whole) start to stablise and come back to some kind of balance, I am beginning to see savvy landlords view the Edgware property market in a different light. Even with the Spring rush, gone are the days where you could make limitless money on anything that had a door, a few windows and roof. This stamp duty change has made more and more landlords, after reading the Edgware Property Market Blog www.edgwarepropertyblog.com take advice on what or not to buy and what to pay, meaning Edgware landlords are being more calculated with their Edgware BTL purchases. I am also seeing a variance between relatively brisk current price momentum and softer expectations in terms of property value growth in Edgware, this in part reflects amplified uncertainty about the short term economic outlook (eg Brexit, Issues in the Far East etc).
Now I know a lot of Edgware landlords brought forward their BTL purchases to beat the stamp duty deadline. However, it is probable that hunger from Edgware investors will return for the right Edgware property later in the year, especially if it’s at the right price and offers a decent yield. However, in the meantime, Edgware FTB’s could and should, in the short term, make hay whilst the sun shines plug the gap and grab a bargain!
If you are a landlord or thinking of becoming one for the first time, and you want to read more articles like this about the Edgware Property Market together with regular postings on what I consider the best buy to let deals in Edgware, out of the many of properties on the market, irrespective of which agent is selling it, then feel free to get in touch! email me on Steve@benjaminstevens.co.uk
If you are in the area feel free to pop into the office we are based at 194 Station Road Edgware Middlesex HA8 7AT– the kettle is always on.
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