New figures have shown that the UK’s buy-to-let property market remains in great shape as purchasing activity forged ahead at the end of the summer. According to Connells Survey and Valuation, activity surged 12.7 per cent in August, suggesting that the major Stamp Duty change brought in earlier this year has been absorbed by the sector.
At the same time, a strong majority of landlords have said they plan to increase their portfolios this year, with 72 per cent telling Your Move that they were equally or more likely to buy properties in the wake of the UK’s vote to leave the EU.
Following on from a first quarter of 2016 which saw a huge surge in landlord purchasing activity in order to beat the three per cent surcharge for additional properties, the second quarter of the year suffered from a slowdown in sales as transactions were brought forward ahead of the 1st April deadline.
As rents have increased to absorb the additional costs to landlords, and confidence seems to have returned to the market following the uncertain lead up and immediate aftermath of the Brexit vote, buy-to-let has continued to be a strong driver behind the property market.
John Bagshaw, corporate services director of Connells Survey & Valuation, commented to The Move Channel, “Now the effects of the Government’s legislation have been digested by lenders and investors alike, buy-to-let activity has increased sharply. The market’s fears over the impact of Brexit are calming and the Bank of England’s decision to cut the base rate last month for the first time in seven years may also have a psychological impact on property investors. Encouraging economic data, high levels of employment and fading fears of a recession have also injected life into the sector.”
Meanwhile, Your Move’s latest figures show a slowdown in the early part of summer, but surveys suggest that demand for rental property is outstripping supply.
Quoted in The Guardian, Adrian Gill, director of Your Move, said “The UK’s vote to leave the EU has not caused any immediate change in the rental market, although we must wait for longer term trends to develop. For landlords, market sentiment remains positive with the vast majority still looking to add to their portfolio of properties, despite the Brexit vote.”
This is backed up by recent figures from the Royal Institution of Chartered Surveyors (RICS), showing demand from tenants gathered pace in July, while there was a reduction in the number of new properties for renting. “This supply/demand mismatch is expected to squeeze rents higher during the year ahead,” a RICS spokesman said.