Press Release Summary: Last year\'s pre-Budget statement saw a change in taxation announced which was widely welcomed by the buy-to-let industry, as the chancellor of the exchequer Alistair Darling revealed major alterations to capital gains tax.
Press Release Body: Last year\'s pre-Budget statement saw a change in taxation announced which was widely welcomed by the buy-to-let industry, as the chancellor of the exchequer Alistair Darling revealed major alterations to capital gains tax.
Up until now, the tax had been levied at between 40 per cent and 24 per cent, the level depending on how long an asset had been owned. Known as taper relief, this system meant that the longer a property was kept in its present ownership, the lower the tax on it. Under the new system all this is changing and from April 6th a flat-rate of 18 per cent will apply.
According to some, this has meant that a number of investors keen to sell some or all of their portfolios have been holding on to their assets while waiting for the rule change before selling. The group credit officer for EMEA structured finance at Fitch, Stuart Jennings, told Mortgage Solutions: \"Data on recent buy-to-let investor behaviour shows an increasing number marking time. This may change when the new tax treatment effectively makes it cheaper to sell.\"
This view has also been expressed by Phil Nicklin, a tax partner at Deloitte. He told the Financial Times: \"There will undoubtedly be lots more property being sold from next week as it will become cheaper to do so.\"
One possible result of such a situation could be a widespread availability of cheap property. While the fact that the property being disposed of will by nature be that which is not currently producing a profit and the lack of scarcity may both keep the prices low, buyers may also wish to consider whether all the available items will be good assets to have. In particular, the paper noted, analysts believe city centre flats could fall yet further in value.
Such a point was made recently by Birmingham estate agency Robert Powell & Co. A spokesperson for the firm stated that, while the city centre had been \"transformed\" in the past 20 years, simply too many apartments had been built there, meaning such homes were not good value investments for those looking to make a profit. She added that at present the firm\'s area of operations is concentrated on \"large houses in Edgbaston\", a leafy suburb close to the city centre which incorporates a golf course and Birmingham University. Investors may decide a property going cheap there is a much better bet.
At the same time, there is a notable demographic profile for those who will sell up this month, according to Steven Hilton of the National Landlords Association. He told the Financial Times: \"Floods of property could come from those speculators who bought in for the capital appreciation, but not from the long-term professional landlords.\" Perhaps much of the property that becomes available has in fact got plenty of potential to generate a good return, but requires a commitment of a duration that those who bought in the hope of a fast buck are unwilling to devote.
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2025
