The Property Market
Commercial Property
It seems Brexit is the sitting duck when something’s not too good, and GDP growth expectations aren’t going to be the exception for being in the fallout zone. Although there doesn’t appear to be the 2008 crash vulnerabilities, it won’t be a surprise to expect property prices to follow-through and rebase – which can only be good for some buyers.
The Key
Change and uncertainty never alters for people in business and the considerations for longer-term business and property investment never alters – Capital values fluctuate and market values fluctuate, but capital values tend to be more consistent, be willing to pay a fair price, and when a bargain comes along, do the homework.
Bargain Hunting
Agents still have a lack of stock on their shelves and pricing for commercial or residential (including BTL) remains susceptible to a mix of market conditions. Bargain hunting doesn’t stop, or wait around for Brexit signals, lenders don’t hang around for BoE interest rate cuts to signal their same moves, and those wanting to capitalize get their thinking caps on.
New Word or Phrase – Portal Juggling
A practice that obscures price cuts to properties and the length of time they have been on sale. Websites removing and relisting homes can distort their perception of the market.
Property Values
Nationwide monthly house index has the average UK house price rising by 0.2% during EU referendum month (June), £204,968 is the average price, showing a 5.1% increase over the year. Share price drops to housebuilders, following the vote, are an indication for some economists that 5% fall in house prices could be expected. The ONS showed a 13.6% annual house price rise in London and a 3.2% annual house price rise in North East.
Personal or Company BTL?
Some landlords are using Corporation Tax rates, already much lower than top rates of income tax (and decreasing), as their strategy in mitigating additional costs brought about by changes to mortgage interest relief. For some, this is a viable option, where retained un-drawn profits can be invested in the company’s name, to personal name purchase. Note – qualified accountants can advise on important nuances of pitfalls and benefits, and consideration should be given to the property choice in regard to any restructuring further down the line i.e. property transfer, stamp duty.
Article credit: Copyright SUF © 2016
