Welcome to this week’s latest instalment of the property-packed newsletter. We have the latest news, hottest topics and actionable steps you should be taking as a property investor.
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Latest update from me
I hope you all had a fun filled evening last night and you are fully stocked with SUGAR!! If anyone stopped by 11 Downing Street for a little Trick or Treating, they were giving out taxes rather than candy. 40 billion worth!
I’m not going to ‘labour’ on the budget outcomes too much as I’m sure you are probably sick of it by now. But I did just want to give my view on the most notable change that will impact the property investing world.
Increase of Stamp Duty Land Tax (SDLT) from 3% to 5% on second homes.
Although this was not expected and may have come as a bit of a surprise to a lot of people, I simply see this as another cost to do business if you are investing in property.
Just like when the 3% surcharge was introduced back in 2016. Yes this was seen as a big change in the SDLT and rather quite annoying. However, we adjusted, factored the new costs into the calculations, and now it’s just seen as the norm.
Same will apply for the increase of 2%. Yes it’s irritating, but we will re-calculate and adjust our numbers, over time this will become the norm… again.
Where this could have an impact…
It’s too early to predict what might happen, but here is my take:
- It may discourage part time investors who are sat on the fence, opening up more opportunities for serious investors.
- Sales volume may drop in the short term as sellers are reluctant to meet the lower offers from investors, but I think this will stabilise.
- Rents might spike in the short term to factor in additional costs, but again, I think this will stabilise.
- I don’t see much change for BTL investing as this is a long game. Holding property for 10-15 years or longer, the 2% increase will seem insignificant when looking back. It’s just a cost to do business.
- Flipping property will see the biggest impact as this is directly reducing profit margins and is a short term strategy. It may discourage more people from going down the flipping route as you will need to be tighter and more confident on your numbers.
Other than that, the budget will have less of an impact than previously expected.
Some other property related budget announcements to be aware of:
- Capital Gains Tax (CGT) on property not increased
- Inheritance Tax (IHT) thresholds frozen until 2030
- Commitment to new homes and infrastructure spending
Pinch, punch, first day of the month… let’s move on.
Have a good November.
Fun fact about me.
Social media is a love hate relationship for me. I hate it, but i’m beginning to learn to love it.
I will be working all weekend getting to grips with video content. Yes, video content! Apparently, it’s the way forward.
So… I look forward to bringing you some video content in the near future. Wish me luck.