Our new PM, David Cameron, has taken every opportunity to highlight that the next few years are going to be had, and that’s especially true for
buy to let investors. The Government is proposing an increase in capital gains tax which will hit all investors when they come to sell their property. The expected increase is likely to be from the current 18% up to 40% on any profit made from a house sale; some reports have even suggested this could be up to 50% in line with the super earners income tax.
Research released suggests that a quarter of landlords are considering
selling to avoid the tax hike, which may put a stop to some of the current gains that have been seen in the property market over the least 6 months. The move will also reduce the attractiveness of buy to let in general, which has already seen increased interest rates, higher deposits and complex regulation to manage tenants deposits.
You may be forgiven from getting confused from all the recent reports around house prices movements. Some papers have been reporting prices getting close to 2007 highs; so far so good. However the Halifax building society, part of the Lloyds Banking Group has released figures showing that May was the second consecutive month to show a drop in house prices. All very confusing, so here is a quick breakdown of the current information
1. Nationwide Building Society’s monthly report showed that the average house price rose from £167k up to £169k because interest rates are still very low and there is a limited amount of houses on the market for people to buy – Good news if your a House Seller
2. Halifax’s report showed that the average price dropped from £168k to £167k due to slowing demand and buy to let landlords planning to offload properties
Whilst these views seem to be at odds, the overall picture is showing that prices will stay flat in 2010 with expected growth in 2011. Estate Agents have been advising House Sellers against waiting until September as the market is desperate for quality properties and above market offers are being made by hungry buyers.
