Since we last spoke we have had the budget and things looks good for the property market.
First of all the vaccination program is going far better than expected. £1.65bn extra has been promised and this has really pushed things forward. I have personally had mine and I was extremely impressed with how slick the operation was.
If they continue and we get to the stage where the majority of the population is vaccinated by the end of July we should be on track to return to some sort of normality over the coming 6 months.
In turn, this will give more confidence back to the property market where clients can get viewings underway along with the rental market.
Other minor shots in the arm (excuse the pun) a return to sporting and leisure events, this will help with Airbnb, the extension of the furlough scheme, again helping the country and individuals ride out the storm, business rate relief to continue which will assist again keeping staff on.
There has been two main features that have given the property market another boost.
The extension of the Stamp Duty
Now, this is slightly convoluted as the rates are tapered.
So the Stamp Duty has been extended until the end of June. Come July you will still get relief up to £250,000 so, as the majority of units for buy-to-let purposes are below this you will not be affected. This gives us until the 1st of October to wrap up all purchases below this threshold.
After October things return to normal.
The other huge plus point which I feel will be far greater than the Stamp Duty is the 5% mortgages. The government announced the 5% mortgage rate as they want to push more 1st time buyers onto the ladder. First-time buyers are actually the key to the property market. They are the ones that drive the market forward. Without first time buyers, the market becomes static, so when first time buyers purchase, this then means the previous first time buyers can step up and become 2nd time buyers and so the process goes on.
This is what fuels the market.
Corporation tax is set to increase to 25% for all business who make more than £50,000 profit. However, this is unlikely to affect property companies as you will need 6-10 properties in your portfolio to reach this level. When you do, you can open up a new company.
So overall the budget was largely positive, I think we have a great run for the next 6 months and then we will see normal service resume where we are getting 4% increases year on year in regards to the growth.
A recent article in The Telegraph and The Times again shows The North is the way to go when investing.