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Surge in buy-to-let activity post-Brexit

Buy-to-let activity surged in August despite the various economic and political challenges that the sector has faced recently, fresh research shows.

Despite the punitive tax rises being imposed by the government on the on the private rented sector (PRS), the market has enjoyed a post-Brexit bounce with buy-to-let valuations up by 12.7% in August compared to the previous month, according to the latest Connells Survey and Valuation research.

From a landlord’s perspective, it has been a tough year, with a raft of changes designed to bring the booming housing market under control and create what the former chancellor George Osborne described as a “level playing field” between homeowners and investors. 

Aside from the introduction of the stamp duty surcharge in April, the 10% Wear and Tear tax relief for landlords who rent out furnished homes has been abolished, leaving them free to only claim for the amount that they have spent, while mortgage tax relief is set to be phased out from next year.

But it would appear that the PRS sector has successfully absorbed the government’s latest policy changes, which explains the recovery in the market.

John   Bagshaw, corporate services director of Connells Survey & Valuation, comments: “Now the effects of the government’s legislation have been digested by lenders and investors alike, buy-to-let activity has increased sharply. 

“The market’s fears over the impact of Brexit are calming, too and the Bank of England’s decision to cut the base rate last month for the first time in seven years may also have a psychological impact on property investors.”

Encouraging economic data, high levels of employment and fading fears of a recession have also injected life into the sector. 

"While we can still see the impact of last government’s damaging set of changes to legislation in the year-on-year numbers, August’s surge in activity highlights the resilience of the buy-to-let sector," he added. 

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