There’s a whole army of wannabe Penicuik first time buyers keen to get on the property ladder and they now have a 3% price advantage over the previously quicker responding army of Penicuik landlords with cash at the ready. Since the start of April, buy to let landlords have had to pay an additional 3% Land & Buildings Transaction Tax (the new name for Stamp Duty in Scotland) so, whilst demand from some Penicuik buy to let landlords has dropped away, in the interim it offers Penicuik first time buyers (FTB’s) a chance to fill the vacuum with less competition from cash rich landlords (over two thirds of buy to let properties were purchased without a mortgage in the last 7 years) who could bid more and complete quicker.
Looking at the average value of a terraced house in Penicuik, currently standing at £137,765, that means if our Penicuik FTB went up against a Penicuik landlord, the landlord would have to pay an additional £4,433 in Land & Buildings Transaction Tax (LBTT). Early anecdotal evidence from fellow property professionals is suggesting landlords are reducing their offers slightly on Penicuik properties to reflect the extra LBTT.
Whilst on the face of it, it appears landlords are being punished by John Swinney, I actually believe this increase in LBTT for landlords is a good thing for the Penicuik property market as a whole.
Over the past five years, the Penicuik property market has performed very well indeed. £147,868,048 has been spent buying 916 Penicuik properties and property values have increased by 13.9%. These figures are nowhere near the heady days before the financial crash of 2007/08 but things were a wee bit out of control then so that is no bad thing!
So as property values in Penicuik (and Scotland and the UK as a whole) start to stablise and come back to some kind of balance, I am beginning to see savvy landlords view the Penicuik property market in a different light. Even with the Spring rush, gone are the days where you could make limitless money on anything that had a door, a few windows and roof. This LBTT change has made more and more landlords, after reading the my blog, take advice on what or what not to buy and what to pay, meaning Penicuik landlords are being more calculated with their Penicuik BTL purchases. I am also seeing a variance between relatively brisk current price momentum and softer expectations in terms of property value growth in Penicuik, this in part reflects amplified uncertainty about the short term economic outlook (eg Brexit, issues in the Far East etc).
Now I know a lot of Penicuik landlords brought forward their BTL purchases to beat the LBTT deadline of 1 April. However, it is probable that hunger from Penicuik investors will return for the right Penicuik property later in the year, especially if it’s at the right price and offers a decent yield. However, in the meantime, Penicuik FTB’s could and should make hay whilst the sun shines, plug the gap and grab a bargain!
If you would like any advice on buying a property to let, feel free to pop into our office at 6 Bank Street, Penicuik for a chat, give us a call 01968 674601 or email us on firstname.lastname@example.org.