In the second half of 2015, the Government made two announcements that will fundamentally change the buy-to-let landscape: as from April 2016, investors will be subject to an additional 3% stamp duty levy and, from 2017, a reduction of tax relief on rental income will be phased in. These higher tax rates may well discourage some investors.
How will the Stamp Duty change affect the East London Market?
The first of April emerges in the distance, and the recent changes in stamp duty for people purchasing a second home begin to take place
This stamp duty change and the ongoing concerns over ‘Brexit’ had initially caused investors’ concerns within the Docklands market. However, we have so far seen one of our most successful starts to the year. Many of our new homes schemes in E14 and Greenwich have seen excellent sales results since the beginning of the New Year with investors still actively backing the market.
There are, as most of us know, great incentives for first time buyers offered by the government and developers alike which has kept good demand from the local domestic market. Generally, first time buyers still believe there is a lot of capital growth potential in the East of London and are wanting to ‘get on the ladder’ while they still have affordability. Equally, investors are offsetting slightly lower yields in favour of capital growth potential. I think it is a very exciting year ahead with some very attractive developments still to come to market.