The number of buy-to-let valuations have fallen sharply since the introduction of the 3% stamp duty surcharge in April. In addition, the proposed ban on letting agent fees have moved to further unsettle the market, according to research from the Connells group.
Undoubtedly, 2016 has been a tough year for buy-to-let landlords, given the raft of tax changes introduced by the Government. These changes have raised concern that those investors with low profit margins could end up making a loss as a result of these alterations.
In fact, some could be pushed out of the sector altogether.
Unsurprisingly, the number of valuations carried out for the buy-to-let sector slipped by 6.1% month-on-month and by 18.5% on a yearly basis to November.
John Bagshaw, corporate services director of Connells Survey & Valuation, observed: ‘2016 has been something of an annus horribilis for landlords. They have had to contend with the reverberations of the 3% stamp duty surcharge and the removal of the 10% wear and tear allowance.’
Buy-to-let valuations down by 18.5% year-on-year
However, despite the number of buy-to-let valuations being down by 18.5%, remortgaging actually rose by more than 20% during the period.
Bagshaw observed: ‘Homeowners want to lock into deals before rates rise. There’s no doubt that remortgaging is driving the mortgage market at the moment.’
During November, there was a surge in people looking to remortgage. Valuations rose by 4.9% in comparison to October, and by 24.6% annually.