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Landlords should take advantage of stamp duty holiday and invest – Mortgages for Business

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  • 17/07/2020
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Landlords should take advantage of stamp duty holiday and invest – Mortgages for Business
Landlords should expand their portfolios now to take advantage of the stamp duty holiday, brokerage Mortgages for Business has advised.

 

The firm said in the medium term, the stamp duty break could benefit sellers as much as buyers so landlords should use the upper hand they have on owner-occupiers to strike on undervalued properties as soon as they become available. 

Steve Olejnik (pictured), managing director of Mortgages for Business said: “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.” 

Analysis carried out by Mortgages for Business, based on data from April and May this year, found 30 per cent of property investors were taking out a buy-to-let remortgage with a view to expand their portfolio and grow their cash reserves.  

Although sellers are more likely to come to market before the end of the tax break in March and improve housing stock, this will only benefit those expanding their portfolios for a short time, the firm said. 

Olejnik said sellers will be more determined to get a good price by the beginning of next year and less inclined to offer discounts. 

He added: “At the moment, sellers are grateful for a sale and there are plenty of potential sellers who would put their property on the market if they thought they could get a deal done.  

“But the closer we get to March 2021, the more sellers are going to start making bids to grab the money that buyers had originally allocated to the government. They will see the spare cash sloshing around the housing market and become less inclined to negotiate.”  

At the Summer Statement last week, the chancellor lifted the threshold at which stamp duty applies from £125,000 to £500,000 in England and Northern Ireland. The new threshold, which also applies to landlords, will run until the end of March 2021.

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