As the tax changes and surcharges begin to take action, we ask what the next step should be for UK property investors.
It has been a busy and difficult 2016 for all property investors. April 2016 was the month that no buy-to-let owner was looking forward to – the month when the long discussed stamp duty surcharge became put into action. This now adds an extra 3% to the stamp duty for those buying a second property. That means for the average London property price of £530,409, stamp duty adds a considerable cost to the purchase of £15,912.27.
So, with this new surcharge, the property investor has to take far more costs and future asset prices and income into consideration before buying. One team of property experts has suggested that the best tactic for the future is to purchase properties in areas which have seen the highest price growth since 2009 and would feel the tax hike the least. They have come up with a top 20 list of regions that will escape stamp duty hike more lightly. They are all in the southern half of England, and the top 10 are all areas close to London which are predicted to experience the highest levels of growth over the next few years.
Of course, not every property investor has the capital available to purchase a new property immediately, especially with the new surcharges. Some other experts have recommended simply waiting for a few years, until around 2019 or 2010, when a flood of new properties come onto the market as many buy-to-let investors release some of their portfolios onto the market and lower prices. However, taking the passive approach can be risky in itself. Sometimes one has to be proactive to reap the rewards.
That is why Arthur recommend treating your property portfolio like a business, especially during a time when costs and profits are more important than ever to the astute property investor. We recommend trying our property management software and using it to optimise and streamline your portfolio so that everything can be tracked, understood, and dealt with easily. Moreover, the increased communication will enable the remote running of your portfolio with far less energy and effort for a small cost. Indeed, this will allow property investors to put their energy elsewhere and concentrate on expanding their portfolio.
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