You don’t need us to tell you about the rising cost of living, and the impact it has on people. As a landlord, you have personal concerns, and genuine concerns over your business activities.
A new study by Aldermore Bank highlights the pressure felt in the housing market, with 70% of prospective first-time buyers struggling to buy property because of increasing costs. The study suggests 32% of these buyers are pausing their buyer activity, and these buyers believe there will be a 20-month delay to their plans.
Jon Cooper, head of mortgage distribution at Aldermore says: “While saving in this current economic climate may feel like a long and arduous journey, we’ve found that the majority of determined first-time buyers think the difficulties are ultimately worth it in order to get on the property ladder. It’s important that prospective buyers are aware of the support available to them. Would-be buyers should consider seeking advice from a broker who can lend a helping hand and guide you through the process of becoming a homeowner.”
Will a stamp duty cut help first time buyers?
While a report in The Times suggests the new Prime Minister is keen to assist more first-time buyers purchase a home, stamp duty cuts aren’t the most effective way to achieve this aim. Before any changes, first-time buyers don’t pay stamp duty on the initial £300,000 of a property purchase, as long as the total price isn’t greater than £500,000.
In many parts of London and the South East of England, average home prices are greater than this level, so first-time buyers will save some money when buying a house.
However, at the end of September 2022, Rightmove states average house prices in Peterborough stand at £231,837 over the past year. The most recent Land Registry information places the average property value in England as £304,867. This is high enough to earn a saving, but many first-time buyers aren’t purchasing at the average price, and even if they did, the saving would be small.
Peterborough rental market demand likely to remain
So, anything which helps people save money when buying property is good, but in Peterborough, first-time buyers might not benefit. This means landlords and property investors should see demand for rental property remain in place for some time.
Richard Donnell, Director of Research at Zoopla, and he said; “While we welcome any changes to reform stamp duty, a major move is needed from the Government to offset the impact of mortgage rates. Rates will more than double this year and impact market activity in London and the South East. Stamp duty is a tax on home buying in southern England and limits buyers at the upper end of the market from moving or getting on the property ladder. Two thirds of stamp duty comes from buyers in London and the South East where house prices are higher and the stamp duty rates on homes priced £500,000+ really add to the cost of moving. To have an impact on the activity levels, stamp duty cuts will need to be targeted at homes priced at £500,000 and above, which currently account for 76% of stamp duty receipts – but only 14% of sales – and the vast majority of which are from London and the South East.”
Just Lets – Here to Help
If you are a landlord in or around Peterborough, and you need assistance in managing your rental property, we can help. We know these are challenging times for landlords, but there is a demand for rental property. When you need guidance in the local market, contact Just Lets Peterborough today, and we will be happy to help you.
The team at Just Lets Peterborough continue to operate remotely to ensure we can continue to serve you and your tenants throughout this covid period and beyond. Please contact us through our usual channels – email us at peterborough@justlets.com or call us today on 01733 346255.
