One in eight properties sold for more than the original asking price in August as housing demand peaked following the chancellor’s decision to introduce a stamp duty holiday to kickstart the economy.
The 13% of properties sold for over the asking price last month, the highest level recorded since November 2015, is an increase from 8% in July, and 10% in June, according to NAEA Propertymark, the professional body for estate agents.
Mark Hayward, Chief Executive, NAEA Propertymark said: “It’s interesting to see that one in eight properties sold for more than asking in August this year.
“Last month, we witnessed a boom in the number of prospective buyers following the government’s announcement of a stamp duty holiday, and it seems this is increasing the level of competition in the property market.”
The latest data from NAEA Propertymark will be welcomed by buy-to-let landlords planning to reduce the number of homes they rent out or exit the market altogether.
A number of investors are looking to offload property in response to higher regulations and taxes.
A deluge of taxes and an uncertain market has seen a number of landlords abandon the buy-to-let industry in recent years.
Some reports suggest that prior to the lockdown landlords were offloading close to 4,000 properties a month, and as a result reducing the supply of much-needed housing stock in the PRS.
The average buy-to-let landlord made £78,100 profit upon selling their rental property in 2019, according to recent research.
Landlords selling up in London made the biggest gains. The average London landlord made a gross gain of £253,580, which is more than 20 times that of a seller in the North East where the average gain was £11,710 in 2019.
In 2019, 84% of landlords sold their buy-to-let for more than they paid for it, with 16% making a loss, according to the research by Hamptons International, part of Countrywide, which analysed data covering England and Wales.
However, the research, which shows that the average landlord selling up had owned their property for 9.1 years on average, found that the profit made by landlords last year was on average down £2,400, or 3%, when compared with the average gross gain landlords made a year earlier. However, this still equates to a 42% gross gain on their initial investment.