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Buy To Let Goldrush: 15% of sales last month went to landlords

No fewer than 15 per cent of all sales agreed in November went to landlords, the highest figure for four years.

The data comes from the research team at Countrywide brand Hamptons - newly rebranded from the old Hamptons International title.

The agency says landlords have joined other buyers in rushing to complete their purchases ahead of the stamp duty holiday ending in late March. 

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Of the 15 per cent, just over half were purchases made in cash.  

Across 2020 investors will buy around 134,000 homes, up slightly from the 133,000 bought in 2019.

The average price paid for a home by a landlord in November was £180,000 which is around £80,000 less than that paid by an owner-occupier.  

This means a typical investor who still pays a three per cent stamp duty surcharge will incur a stamp duty bill of £5,400 if they complete before the holiday ends. However, if they miss the deadline the typical bill will rise by £1,100 to £6,500.

Landlords will pay an estimated total of £365m in stamp duty on the sales they have agreed between September and November if they complete before March 31.  

However, this figure has the potential to rise by 20 per cent or £74m - taking the total to £440m - if the stamp duty holiday is not extended and they complete after the end of March next year.                                                                                                 

Regionally this rush has been concentrated in the Midlands and the North. 

Some 22 per cent of homes sold in the West Midlands were bought by an investor, followed by 18 per cent in both the North East and North West.  

Even in London - not favoured by investors in recent times - the figure stands at 15 per cent.

“Just like in the months leading up to the introduction of the three per cent second home surcharge back in 2016, landlords have rushed to take advantage of reduced stamp duty bills” notes Aneisha Beveridge, head of research at Hamptons. 

 

“But the difference between today and 2016 is that the stamp duty cliff edge is around five times smaller, meaning the financial impact of missing the deadline is reduced.

“With over half of investor purchases made in cash during November, those taking advantage of the holiday are disproportionately larger investors expanding portfolios rather than new investors starting out.  And with landlords also making up a rising proportion of sellers, in many cases, larger landlords are buying homes from smaller landlords."

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