One week into January. Most of the decorations are down. The debauchery over Christmas has ended and people are starting to get their act together again. This might be health-wise, business-wise or perhaps investment-wise.
I’ve had a number of calls in the last few days from investors who are keen to buy an investment property before the stamp duty increase comes into play in April. For those of you that don’t know about the stamp duty increase just google it and you will find a plethora of articles. Sumarised in simple terms there will be a 3% increase in stamp duty on buy to let properties in Watford and indeed the whole of the UK.
Watford Property Market
So what does this mean for investors in Watford? Well without doubt there is going to be a rush to buy and a rush to complete before April. Alongside that it’s highly likely prices will be pushed up again in the first 3 months of the year. If you are buying now you will need to make sure you’ve got a very proactive solicitor so don’t go for the cheapest!
My personal opinion is prices will then level off after April as the buyers who could just about afford a buy to let property in Watford realise they need to stump up another £8,000 and either go somewhere cheaper or don’t buy all together.
I don’t think this increase in stamp duty will completely put investors off though. It just needs to be seen as an additional up-front cost. It is worth bearing in mind that the cost of stamp duty is claimable against your capital gain when you sell the property but it does mean you’ll have to buy and hold the property for a longer term. This in my opinion is where you get the bigger wins – by holding long term.
The next big thing to affect investors this year will be the change to tax relief on buy to let mortgage interest. It will be even more important to understand your financial situation and whether an investment will work for you. If you don’t have an accountant now will be the time to hire one. This change is being strongly contested by landlords across the UK – get all the latest information on this here:
There will be lots of other factors that contribute to the Watford Property Market this year and I’ll do my best to keep you abreast of them.
My opinion is Watford has a lot going for it and there is a lot of development on the Horizon which will contribute to the improvement of this town. I believe investors will continue to invest, residential buyers will continue to buy and property prices in Watford will continue to rise. If I had to speculate on a number I’d say 4-5% growth but who knows what might happen as a result of everything above!
I wish you a Happy and prosperous 2016 and as always if you have questions about property investment in Watford or would like a second opinion on a purchase you are considering then do give me a call or send me an email and I’ll be happy to help!