Buy-to-let landlords urged to act fast due to the stamp duty holiday
Property investors have been urged to take advantage of Rishi Sunak’s stamp duty holiday by expanding their portfolios.
Buy-to-let broker Mortgages for Business recommended for investors to buy quickly before the likes of second steppers are able to do the same.
The cut could benefit sellers as much as buyers, as they could take advantage of increased demand to raise prices.
Steve Olejnik, managing director of Mortgages for Business, said: “Clearly, landlords need to take advantage of the stamp duty holiday before the window closes in March next year.
“Property investors are in a better position to qualify for a mortgage now that reduced stamp tax allows them to wield a larger deposit.
“Furthermore, if the measures Rishi Sunak has put in place underpin property values, the cut will help those looking to remortgage as well.
“Less obviously, landlords may not appreciate they need to act while they are well-placed to move in a way that owner-occupiers are not.
“We know property investors have been remortgaging with a view to picking up some bargains. Owner occupiers have not been doing the same.
“Landlords have been preparing since the start of the lockdown, remortgaging to enlarge potential war chests with an eye on bagging bargains in the future.
“First-time-byers don’t have that flexibility and owner-occupiers haven’t been remortgaging in the same way. That means landlords are currently very well-placed to seize the day.
“But that advantage won’t last forever. That’s why smart investors will start expanding their portfolios immediately, rather than waiting and then scrambling to try to do deals at the last minute.”
Analysis carried out by Mortgages for Business, based on data from April and May this year, found landlords were remortgaging with a view to expanding their portfolio.
Some 46% of landlords had been increasing the size of their loans – significantly higher than the long-term average of 38%.
Property investors must expand their portfolios sooner, rather later, according to Mortgages for Business.
The chancellor has lifted the threshold at which stamp duty kicks in from £125,000 to £500,000 in England and Northern Ireland until March 2021.