The implications of the 2016 stamp duty change, whereby buyers of additional properties were charged an extra 3% in stamp duty, were not lost on anyone with an interest in buy-to-let. Prior to the April 2016 increase, there was a marked uptick in property purchases for buy-to-let purposes. However, the market remains healthy following stamp duty increase – it’s just that investors have changed their outlook.
Stuart Johnson, Business Development Manager at Prime Centrum, explains,
“Before the stamp duty increase, investors were incredibly focused on the potential yields of buy-to-let properties. Now, we’re seeing investors take a more considered approach to the market. Their buy-to-let investments are as much about long-term capital growth as about sustainable yields.”
Of course, yields will always be important to the buy-to-let sector. But now renewed attention is being paid to the potential for capital gains. Liverpool offers an excellent example of this shift in priorities. The city is one of the highest yielding in the country so far as buy-to-let properties are concerned, but investors are increasingly looking at its capital growth potential as well.
Thankfully for Liverpool, the numbers certainly stack up so far as capital gains are concerned. The Savills five year forecast projects property price rises of 18.2% for Liverpool, making the city a very tempting prospect for buy-to-let investors who are happy to sit back and enjoy their yields for years to come, at the same time as their property is rising in value.
Even more interesting is the opportunity to invest in under-valued areas of the market. Again, Liverpool provides the perfect example. Parliament Residence, the city’s most iconic waterfront real estate development, is being offered to the market at an early investor discount of 22%, with investment from £109,900. The price means instant equity for investors, as well as the potential for the gains projected by Savills over the years ahead.
With the stamp duty changes altering the market deeply, it is solid investment prospects like Liverpool that will serve to keep the buy-to-let dream alive for many investors over the months and years ahead.
Southampton / From £142,900
Liverpool / From £94,000
Liverpool / From £119,950
Hull / From £59,950
Bracknell / From £210,950
Liverpool / From £119,900
London / From £229,571
Liverpool / From £109,900
Leeds / From £89,900
Liverpool / From £64,030