Considering Investing In Property In 2017? The Top 3 Things To Remember

property invest

Property was hit hard for investors in 2016, not just by the gloomy shadow of Brexit but by the changes made to the stamp duty tax in the spring. The new legislation added an extra three per cent to the stamp duty bills of those buying a second property from April 1st 2016.

This has meant investors buying freehold properties in London at around £530,000 will not have to pay a massive £32,400 in stamp duty alone. The Government’s reason behind practically doubling Stamp Duty tax is that they are trying to make cheaper homes more accessible for first-time buyers rather than just investors and landlords.

To work out where this leaves you as an investor, it’s best speaking with a professional such as Jason Harris at First Urban who will be able to advise you on your individual situation. It isn’t all bad news – 2016 saw properties reach a flat line for the first time in a long time. Property prices were up across the UK by 6.9% year-on-year, which is the lowest in a while, so, is now the time to get your hands on a bargain? To make things a bit clearer, here are three things to remember if you’re considering investing in property in 2017.

Investing in buy-to-let property

The first big hit came from the change to Stamp Duty for landlords then came the tidal wave news that April 2017 would hit them again with even more tax changes. Currently, as a landlord you can offset the entire mortgage interest costs against the rent that you are getting from the property before declaring a total income. Starting from April 2017 this is going to change so that by 2021 just 20% of the interest will be subject to tax relief. This is because at the moment, the government believes the more successful the landlord, the less tax they are having to pay so they are essentially turning it on its head.

 

Looking at the luxury market

Depending on how much cash you have to play with in the first place, you may be able to rethink the golden eggs of the housing market. According to Savills, there is not going to be any price growth in the centre of the capital this year and the house prices are already down nine per cent. With this flatline it might be time for people who didn’t think they could afford the area to have a look into buying as an investment for when the prices start to increase again.

 

Even more new properties

This year is going to be dominated by new properties coming onto the market.

With a huge shortage of housing, the government have big plans for development, predominantly to get first-time buyers on the housing ladder but there will still be opportunities for investors. Developers will need investors to buy the housing that they are building at the larger end of the spectrum that isn’t affordable to first-time buyers.

 

Written by Julie Hanson

Julie is passionate about property – development, investment and portfolio planning. Along with husband Alec, Julie is actively building a property portfolio while helping others to do the same.

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