£9,600 boost to Chipping Norton First time buyers
There’s a whole legion of wannabe Chipping Norton 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 Chipping Norton 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 Chipping Norton buy to let landlords has dropped away, in the interim, it offers Chipping Norton 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 a terraced house in Chipping Norton currently standing at £322,600, that means if our Chipping Norton FTB went up against a Chipping Norton landlord, the landlord would have to pay an additional £9,678 in stamp duty. Early anecdotal evidence from fellow property professionals in the town is suggesting landlords are reducing their offers slightly on Chipping Norton 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 Chipping Norton property market as a whole.
Since 2011/12, the Chipping Norton property market has performed very well indeed. Over the last 12 months, £122,862,630 has been spent buying 330 Chipping Norton properties. Figures from the Land Registry have just been released and month on month in our council area, property values are 0.9% higher, yet 8.9% higher year on year. These figures are nowhere near the heady days of 2003 (February to be exact), when Chipping Norton property prices rose by 20.3% in 12 months.
So as property values in Chipping Norton (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 Chipping Norton 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 Chipping Norton Property Market Blog take advice on what or not to buy and what to pay, meaning Chipping Norton landlords are being more calculated with their Chipping Norton BTL purchases. I am also seeing a variance between relatively brisk current price momentum and softer expectations in terms of property value growth in Chipping Norton, 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 Chipping Norton landlords brought forward their BTL purchases to beat the stamp duty deadline. However, it is probable that hunger from Chipping Norton investors will return for the right Chipping Norton property later in the year, especially if it’s at the right price and offers a decent yield. However, in the meantime, Chipping Norton FTB’s could and should, in the short term, make hay whilst the sun shines plug the gap and grab a bargain!
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