The Black Brick agency, which operates with high net worth clients, is forecasting that 2020 will see the arrival of a new breed of buy to let investor.
In its prediction for the next 12 months the agency says that while recent tax changes have forced small investors to exit the buy to let market, the sector is increasingly attractive to large professional investors.
“We have seen a return in demand for buy to let properties in 2019 from deep-pocketed buyers less reliant on borrowing, and those who can structure multi-unit deals as corporate purchases, which can achieve favourable tax treatment” says the firm.
However, one possible disincentive for the high-end buy to let market may be the imposition of a further three per cent stamp duty surcharge for non-resident overseas buyers - that’s a pledge from the Conservative party should it win the December 12 General Election.
This would increase the top rate paid SDLT on the most expensive properties to 18 per cent.
“We think such a surcharge – while it mirrors those imposed by other international cities such as Hong Kong, Singapore and Vancouver – would be a negative for prime central London, although we would expect the market to absorb the increase as it has with earlier tax rises” says the Black Brick forecast.
The agency says that for many property deals, especially in PCL, 2019 was a year spent on hold.
“The lack of clarity – over Brexit, the direction of property prices, the future of the global economy – encouraged many potential sellers to sit on the sidelines and buyers to keep their powder dry” says Black Brick.
On the sales market, the agency anticipates that PCL will be seen to offer good value.
It cites Coutts Bank suggesting that prices in prime locations have fallen in percentage terms more than elsewhere in London – down 15.2 per cent since 2014, with some falls in excess of 20 per cent.