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Search for Cheaper Properties Increases among Landlords Due to Stamp Duty Surcharge

In response to the recent raise in Stamp Duty tax on second properties, a new index reports that landlords are increasingly searching for more affordable properties.

Property Investment & Pensions 2015

In response to the recent raise in Stamp Duty tax on second properties, a new index reports that landlords are increasingly searching for more affordable properties.

In their latest monthly index, lettings and estates agent Countrywide, show that landlords’ attitudes towards the UK’s residential market are changing following the 3% increase in Stamp Duty, with the average property purchase price amongst investors falling from March to April.


The average price paid by landlords fell by 8.3% from the previous month – from £194,000 in March to £178,000 in April. London saw the greatest fall in the average price paid, with homes costing landlords in April 16.4% less than in the previous month – from £436,000 to £365,000.


The index also revealed that April saw fewer landlords purchasing homes, although the number of residential properties sold in March 2016 hit a record high. In fact, the proportion of homes sold to landlords decreased by 50% in April whilst those sold to first-time buyers increased by 20%.


Nonetheless, the report highlights that regional differences exist in landlords’ behavioural patterns, with lower priced markets seeing an increase in the average priced paid by landlords in areas such as the North East and Yorkshire.


The index also shows that rental growth continues on an upward trajectory in 2016, although at a slower pace than 2015, with rents increasing 2% over the last year and the average UK rental rate now set at £935.


In response to the release of their latest figures, research director at Countrywide Johnny Morris said: “There are early signs that first time buyer numbers are increasing as investor activity has declined. But it’s too early to tell whether this is simply the after effects of the stamp duty rush or the start of a longer term trend.”

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