Will the end of the BTL Rush To Buy see a new housing market dynamic?

michaels

http://www.bbc.co.uk/news/business-36100104

A "late surge" among landlords aiming to beat a stamp duty rise led to a big jump in mortgage lending in March.
Gross mortgage lending hit £25.7bn last month, the Council of Mortgage Lenders (CML) said. This was 59% higher than in the previous March.

The surge was also recorded in property sales data from HM Revenue and Customs (HMRC).
There were 161,990 properties sold in the UK during the month, the highest monthly number since June 2006, and up from 92,690 sales in February.

I would have thought we were likely to see at the very least the property market taking a 'breather'.

I am also strongly in the 'expectations' camp when it comes to economics so if the market appears to be stagnating/falling a lot of the current demand could evaporate as people decide they don't want to buy into a falling market.

Now we know from experience that what happens in these cases is that market transactions dry up rather than prices falling but that is always bad news for the wide economy.

(Final aside - I wonder if all that lovely pulled forward stamp duty helped flatter these figures: http://www.bbc.co.uk/news/business-36099314

Public borrowing in March fell by £2.6bn from a year earlier to £4.8bn.

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mwpt

A nation of landlords. We can all rent to each-other and everyone can get rich and retire early from capital gains.

On your latter point, George will try every trick in the book to bring forward tax collection to try and meet his targets.

My guess is for a flat(isa) period of HPI or for a few months while landlords face the reality of the 3% surcharge. I wish that the reduction in interest relief had been brought forward faster to coincide with this but I bet George planned it nicely staggered as he didn't want to spook the market too much.

wotsthat

The recent Rightmove release was quite interesting (would've posted it but I thought we only did Europe now). Their representative reckoned the dynamic of the rush wasn't just BTL's getting out swapping with BTL's getting in but also OO's selling to trade up.

If Rightmove are correct then the rush might lead to a mini cascade of chains and therefore increased transactions generally.

Personally I'm not that convinced and would've thought we're in for a quiet few months.

cells

Will be a lot more clear in 3 months but currently my observations are


1: Estate agents I dont work with calling/emailing me. This is always a sign of a weaker market they never call when things are going strong

2: The agents I deal with saying market has slowed notably

3: Some properties I was interested in which went Sold Subject to contract are now back on the market

4: The owner side of the market looks decent value. A few properties on or near the £1m mark seem quite good value the type I would have expected to be on rightmove for no more than a week or two. Too early to call but if they are not shifted within the next 2-3 weeks it could be downwards pressure on the owner side

Conrad

So I've been selling a flat, and looking to buy another, and keep a very close eye on my market. My observations are that the price of flats and houses are still rapidly rising by the month - so little supply that everything is snapped up. Prices are some 25% higher here than 1 year ago.


New build flats (often office conversions), keep getting upwards price revisions as developers find they can keep increasing prices and still they sell.


What alternatives do investors have? Many do not trust / know equities and packaged investments and prefer doing their own thing. Many of us have ISA's and such-like anyway, so it's not either / or.


Stamp duty is a pain, but hey-ho, it's just the way it is, again many people will not invest in other asset arenas.


No chance of price falls, at least not in booming prosperous areas.


Big ripple effect out of London into home counties - always been the case, but particularly pronounced at the moment.


Areas bordering London that are still offering value relative to not so great / average parts of London, could easily see a doubling in prices in coming 5 years

padington

There will be a rest then the boom will continue after the euro referendum until 2017, then it will be growth but much slower, I would have thought.