Buy-to-let is without doubt the most talked-about area of the mortgage market at present. But last week there was a noticeable shift in the debate. Towards the end of November, the dialogue had centred around what the cumulative effects of the new tax policies would be, but last week commentators decided to focus more on logistics.
Assuming the consultation process does not result in any major changes to policy, it is clear all involved in the market need to move quickly. While all elements of the Chancellor’s new policies will affect how landlords run their portfolios, the most pressing is the new stamp duty rates, which will launch in April.
It would be wise for brokers to contact their clients now, bearing in mind the length of time it takes to act.
It is expected that ‘corporates’ with more than 15 properties will be exempt from the new stamp duty rates, although Autumn Statement documents suggest this is still to be decided in the consultation. But there are only a handful of lenders offering limited company buy-to-let and they will struggle to deal with the expected influx of business. While it has been predicted that lenders will pile into this sector, it is unlikely that enough of them will be able to launch propositions in time to ease the burden.
One must also consider the effects on other parts of the chain, such as conveyancers. Last week, Broker Conveyancing managing director Harpal Singh warned of “mayhem” for solicitors. He said: “The four-month notice period is incredibly short and it is likely to mean a very busy time for all stakeholders, particularly the conveyancing profession who are going to be pushed by all concerned to try and complete purchases before
31 March next year.
“This will mean serious resource issues for these firms, especially when we factor in the double whammy brought about by the timing of the Easter break next year and the fact we’re not just talking about individual investment property completions but also the entire chains that they will sit within.”
Four months may seem like a long time but none of us can afford to be complacent. Now is the time to act.