In this post credit crunch world of sub terrain low interest and annuity rates, the growth of buy-to-let since 2009 has been phenomenal. The rates are so low, even a limbo dancer would struggle! So much so, there has been an evolution in purchase of property in the UK from that of just buying the roof over one’s head to that of a buy-to-let investment where it is seen as a standalone financial asset to fund current and future investment – complimenting or even replacing a pension. So recently, a couple of weeks before the release of latest Land Registry data of property transactions, quite a few market commentators were anticipating a huge increase in the number of properties sold in March as the 1st April 2016 stamp duty deadline got closer.
So what do the numbers tell us?
Looking at the most recent set of data from The Land Registry, it seems there has been a drop in the number of completed property sales in the Walsall Metropolitan Borough Council area. Year on year, completed property sales, according to the latest set of data released – fell by 23.3% to 60 compared with 74 in 2015. Nationally, the number is slightly dissimilar to say the least, as the number of completed house sales fell by 5% in 2016 compared with 2015. Some might say this counters the reports that there was a rush by landlords to buy investment property ahead of the 1st April 2016 deadline but where was the stampede that many expected? Where was the mad rush to expand buy-to-let portfolios before landlords entered the ‘Last Chance Saloon’ of property investment?
Looking even closer to home, in the WS1 postcode in March 2016, 30 properties changed hands, whilst 23 properties did so in March 2015. It’s even more interesting when you look at the average price paid, in March 2016, it was £136,223 yet in March 2015, the average price paid was £140,941.
Is the buy-to-let dream over for Walsall landlords?
As ever, my Walsall Property Blog reading friends, the devil is in the detail. The 3% stamp duty surcharge for buy-to-let landlords was announced in the Autumn Statement on the 25th November 2015. Anyone who has bought a property knows from their offer being accepted to receiving the keys and monies paid is a long drawn out affair, taking on average 8 to 12 weeks, as the Land Registry only get notified upon completion of the sale. We also need to factor in that Solicitors seem to have the last two weeks of December off anyway.
So why all the doom and gloom? Simple.. bad news in Britain gets the headlines. Let’s be honest, the headline to this article is designed to be eye catching. However, when we look at both the bigger and smaller picture; nationally, property values dropped month on month by 0.5%; in the West Midlands region they dropped 2.5%, whilst in Walsall they rose by 2.2%. The year on year figures tell a completely different story to that.
It just goes to show you should look deeper into something before making a judgment! For more thought provoking commentary on the Walsall property market – sign up to the Walsall Property Blog or call me directly on 01922 311016.