Investors enjoy buy-to-let boom post-Brexit
Permitted development rights are set to be extended in the autumn. Picture: Getty Images/iStockphoto - Credit: Getty Images/iStockphoto
Buy-to-let investors aren’t letting Brexit stop them from snapping up property, with a 12.7 per cent rise in activity recorded in August.
While this was a sharp increase on the previous month, the research from Connells Survey and Valuation shows that it was still 19.7 per cent down on August 2015.
A ‘post-Brexit bounce’ certainly seems to be occurring however, with investors refusing to be deterred by the Government’s 2015 policy changes, which included the introduction of an additional 3 per cent stamp duty surcharge.
John Bagshaw, corporate services director of Connells Survey & Valuation, said: “Now the effects of the Government’s legislation have been digested by lenders and investors alike, buy-to-let activity has increased sharply.
“The market’s fears over the impact of Brexit are calming, too and the Bank of England’s decision to cut the base rate last month for the first time in seven years may also have a psychological impact on property investors.
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“Encouraging economic data, high levels of employment and fading fears of a recession have also injected life into the sector. While we can still see the impact of last Government’s damaging set of changes to legislation in the year-on-year numbers, August’s surge in activity highlights the resilience of the buy-to-let sector.”
First-time buyer activity has also been on the rise, recording the strongest overall increase in valuations – up by 6.8 per cent on July and by 19.6 per cent year-on-year.
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Remortgaging valuations were also up 4.2 per cent from July, and 1.5 from last August.
John Bagshaw continued: “First-time buyers have enjoyed a month of growth and the sector is continuing to thrive following a strong July – given first time buyers are the engine of the property market, this is very significant.
“August has also seen a surge in activity in the remortgaging sector, partially fueled by the interest rate.”
Overall valuation activity rose by 5.1 per cent between July and August across all sections of the market. There was also a small annual increase, with 0.2 per cent more valuations carried out than in August 2015.
John Bagshaw concluded: “Overall market activity remains steady and fears of a post-Brexit slump has failed to emerge. In the first full month after the Bank of England’s decision to cut interest rates, the buy-to-let market has seen a surge in activity. Powered by low interest rates, landlords have taken the opportunity to remortgage.”
