There’s a whole legion of wannabe Morley first-time buyers keen to get on the property ladder and they now have a 3% price advantage over the previously quicker responding army of Morley landlords with cash at the ready. Since the start of April, buy to let landlords have had to pay an additional 3% stamp duty so whilst demand from some Morley buy to let landlords has dropped away, in the interim, it offers Morley first time buyers (FTB’s) a chance to fill the vacuum, with less competition from cash rich landlords (over two thirds of BTL properties were purchased without a mortgage in the last 7 years) who could bid more and complete quicker.
Looking at the average value of a terraced house in Morley currently standing at £120,500, that means if our Morley FTB went up against a Morley landlord, the landlord would have to pay an additional £3,615 in stamp duty. Early anecdotal evidence from fellow property professionals in the town is suggesting landlords are reducing their offers slightly on Morley properties to reflect the extra stamp duty.
Whilst on the face of it, it appears landlords are being punished by No.11 Downing Street, I actually believe this increase in stamp duty for landlords is a good thing for the Morley property market as a whole.
Over the last 12 months, £120,538,023 has been spent buying 785 Morley properties
Since 2011/12, the Morley property market has performed very well indeed. Over the last 12 months, £120,538,023 has been spent buying 785 Morley properties. Figures from the Land Registry have just been released and month on month in our council area, property values are 0.5% higher, yet 4.75% higher year on year. These figures are nowhere near the heady days of 2003 (April to be exact), when Leeds property prices rose by 30.3% in 12 months.
So as property values in Morley (and the UK as whole) have started to stablise and come back to some kind of balance, I am beginning to see savvy landlords view the Morley property market in a different light. Even with the Spring / Summer rush, gone are the days where you could make limitless money on anything that had a door, a few windows and roof. This stamp duty change has made more and more landlords, after reading the Morley Property Market Blog, take advice on what to buy or not to buy and what to pay, meaning Morley landlords are being more calculated with their Morley BTL purchases. I am also seeing a variance between relatively brisk current price momentum and softer expectations in terms of property value growth in Morley, this in part reflects amplified uncertainty about the short term economic outlook (eg Brexit, Issues in the Far East etc).
Now I know a lot of Morley landlords brought forward their BTL purchases to beat the stamp duty deadline. However, it is probable that hunger from Morley investors will return for the right Morley property later in the year, especially if it’s at the right price and offers a decent yield. However, in the meantime, Morley FTB’s could and should, in the short term, make hay whilst the sun shines plug the gap and grab a bargain!