There’s
a whole legion of wannabe Dartford 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 Dartford 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 Dartford buy to let
landlords has dropped away, in the interim, it offers Dartford 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 Dartford currently standing at £266,700,
that means if our Dartford FTB went up against a Dartford landlord, the
landlord would have to pay an additional £8,001 in stamp duty. Early antidotal
evidence from fellow property professionals in the town is suggesting landlords
are reducing their offers slightly on Dartford 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 Dartford property market as a whole.
Since
2011/12, the Dartford property market has performed very well indeed. Over the
last 12 months, £374,349,168 has been spent buying 1,392 Dartford
properties. Figures from the Land
Registry have just been released and month on month in our council area,
property values are 0.8% higher, yet 10.2% higher year on year. These figures
are nowhere near the heady days of 2003 (April to be exact), when Dartford
property prices rose by 25.4% in 12 months.
So
as property values in Dartford (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 Dartford
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 Dartford Property Market Blog [www.dartfordproperty.blogspot.co.uk]
take advice on what or not to buy and what to pay, meaning Dartford landlords
are being more calculated with their Dartford BTL purchases. I am also seeing a
variance between relatively brisk
current price momentum and softer expectations in terms of property value growth
in Dartford, 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 Dartford
landlords brought forward their BTL purchases to beat the stamp duty deadline.
However, it is probable that hunger from Dartford investors will return for the
right Dartford property later in the year, especially if it’s at the right
price and offers a decent yield. However, in the meantime, Dartford FTB’s could and should, in the short term,
make hay whilst the sun shines plug the gap and grab a bargain!
