There’s a whole legion of wannabe first-time buyers in Camberwell; they are keen to establish themselves on the property ladder and now have a 3% price advantage over Camberwell landlords. Over the last seven years, more than two-thirds of properties were purchased without a mortgage. However, since the beginning of April, buy-to-let landlords have been required to pay an additional 3% stamp duty. The effect of this is that demand from some Camberwell buy-to-let landlords has dropped away. In the interim, Camberwell first-time buyers (FTB’s) have a chance to fill the vacuum. These FTB’s now have less competition from those cash-rich landlords, who previously would place higher bids and complete on purchases more quickly.
With the average value of a flat in Camberwell currently standing at £346,400, if a Camberwell FTB went up against a Camberwell landlord in a property purchase, the landlord would have to pay an additional £10,392 in stamp duty. Early anecdotal evidence from fellow property professionals is suggesting that landlords are reducing their offers slightly on Camberwell properties, perhaps to reflect the fact that they are now required to pay this additional stamp duty.
While it may seem that the government is punishing landlords, I tend to hold the view that this increase in stamp duty for landlords is a positive thing for the Camberwell property market as a whole.
Since 2011/12, the Camberwell property market has performed very well indeed. Over the last 12 months, £310,763,657 has been spent, buying 561 Camberwell properties. However, newly-released Land Registry figures show that property values actually dropped slightly between January and February.
So as property values in Camberwell, and the UK as a whole, start to stabilise, I wonder if savvy landlords will begin to view the Camberwell property market from a different perspective. Even with the Spring rush, gone are the days where you could make vast amounts of money on anything with four walls and a roof. This means that landlords are being more careful with their Camberwell BTL purchases. I have also personally noticed softer expectations in terms of property value growth in Camberwell. This can be partially explained by the uncertainty about the short-term UK economic outlook, particularly with regards to issues such as Brexit and a slow-down in economic activity in the Far East.
I know that a lot of Camberwell landlords brought forward their BTL purchases to beat the stamp duty deadline. However, it is probable that hunger from Camberwell investors will return for the right Camberwell property later in the year, especially if it’s at the right price and offers a decent yield. In the meantime, Camberwell FTB’s could and should make hay whilst the sun shines, and grab a bargain!