Buy To Let Activity Bouncing Back

September 14th 2020
By: Thomas Morris
Buy To Let Activity Bouncing Back

It is easy to see why the focus on reporting of the stamp duty holiday has fallen on property buyers. The measure was introduced to stimulate buyer activity, and there is no denying there has been significant movement in recent weeks.

However, the stamp duty holiday is also likely to have a positive impact on landlords. There is an opportunity for landlords and property investors to expand their property portfolio at a more affordable price.

Landlords have to pay the surcharge associated with buying an additional home, but they will receive the stamp duty holiday open to all buyers. Lowering the overall cost of buying property is of great benefit to landlords.

This move relieves some of the up-front pressure faced by landlords when investing in property. Also, with the overall fee paid by property investors being lowered, this can help landlords to achieve a more appealing expected rental yield.

A better yield helps landlords achieve success

A better rental yield might be the factor which persuades a landlord to buy additional property, therefore expanding the supply of rental property in an area. In the long-term, this is also of benefit to tenants.

There has been a survey undertaken by Cherry, a mortgage adviser forum, and the findings suggest an increased in demand from individuals and from limited companies.

Demand is evolving from landlords

Over 30% of brokers have reported an increase in individuals buying to let. 26% of brokers said they have arranged deals for limited companies operating in the buy to let market.

57% of mortgage brokers who responded said they have experienced an increase in acquisitions and 12% of brokers said they have experienced an increase in remortgage deals.

7% of brokers have stated an increased in demand for properties which are classed as houses in multiple occupation (HMOs) and 3% of brokers have experienced an increase in enquiries for lending on holiday lets and multi-unit block of flats.

There has also been an increase in short-term lending, with 7% of brokers admitting to helping clients source bridging solutions.

Donna Hopton is a director at Cherry, and she said; “It’s clear there has been a spike in buy-to-let activity in recent weeks. Whereas the BTL market has been dominated by remortgage business in recent years, it is purchase enquiries that are currently keeping brokers busy. This window of opportunity for reduced stamp duty land tax will certainly be helping to drive this demand, but we are seeing that the market is generally buoyant, which is a positive sign for advisers, and the economy.”

At Thomas Morris, we know many landlords are interested in expanding their property portfolio while capitalising on the stamp duty holiday”, said Thomas Morris Royston Branch Robert Arnold. “If you are keen to learn how you can benefit from the stamp duty cut, get in touch and we will be more than happy to talk you through the process.”

If you are looking for help with any matter of the rental market, it is best to speak to property professionals. You can book a sales or rental valuation appointment directly on line at a time and date of your choice by clicking here or alternatively or you can phone our Royston branch on 01763 243331.