£8,700 boost to Bexley Borough First time buyers

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There’s a whole legion of wannabe first-time buyers keen to get on the property ladder – and now they have a 3% price advantage over the army of landlords with cash at the ready who used to be quicker to respond. Since the start of April, buy to let landlords have had to pay an additional 3% in stamp duty. This means that, whilst demand from some Bexley Borough buy to let landlords has declined, it offers first time buyers (FTBs) 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 can bid more and complete more quickly.
The average value of a terraced house in Bexley Borough currently stands at £291,500, so if a FTB went up against a landlord, the landlord would have to pay an additional £8,745 in stamp duty. Early anecdotal evidence from fellow property professionals suggests landlords are reducing their offers slightly to reflect the extra stamp duty.  
Whilst it might appear that landlords are being punished by No.11 Downing Street, I believe that this increase in stamp duty for landlords is a good thing for the Bexley Borough property market as a whole.
Since 2011/12, the Borough’s property market has performed very well. Over the last 12 months, £656,606,130 has been spent on 1,137 properties. Figures from the Land Registry have just been released, showing that, in our council area, property values are 2.1% higher, month on month, and 15% higher year on year. These figures are nowhere near the heady days of 2003 (April, to be exact), when prices rose by 27.6% in 12 months.
As property values in the Borough (and the UK as whole) start to stabilise and return to some kind of balance, I am beginning to see savvy landlords viewing the property market in a different light. Even with the spring rush, gone are the days where you could make limitless money on anything with a door, a few windows and roof. This stamp duty change has made more and more landlords, after reading the Bexley Borough Property Market Blog (www.bexleyproperty.co.uk), take advice on what to buy (or not) and what to pay. Landlords are being more calculated with their BTL purchases. I also see a disconnect between relatively brisk current price momentum and softer expectations in terms of property value growth in the Borough, partly reflecting amplified uncertainty about the short term economic outlook (e.g. Brexit, issues in the Far East, etc.).
I know that many landlords brought forward their BTL purchases to beat the stamp duty deadline, but I feel it’s probable that hunger from investors will return for the right property later in the year, especially if it’s at the right price and offers a decent yield. In the meantime, FTBs could and should plug the gap and grab a bargain!

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