As autumn approaches, landlords might be feeling the heat!
Gareth Overton of Henry Adams, an agency operating in Hampshire, Sussex, and Surrey, suggests that the fear of further taxes on the private rental sector could lead to a surge in landlords selling their properties this autumn.
Overton notes that the summer property market has been fairly active, with increased stability providing a solid foundation for strong sales. Despite the much-anticipated election causing only a slight dip in viewings, the upcoming Autumn Budget might bring more significant changes. Buy-to-let landlords are particularly wary of potential Capital Gains Tax (CGT) implications.
Chancellor Rachel Reeves has hinted at the possibility of raising CGT rates, aiming to strike a balance in tax policy. With Labour ruling out many other tax increases, CGT could be targeted in the October 30 Budget. The Office for Budget Responsibility expects CGT to raise around £15 billion this year, rising to £23.5 billion in five years.
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Overton’s comments were in response to the latest Rightmove asking price index, which shows a seasonal drop of 1.5% this month to an average of £367,785. This drop is in line with the long-term average for August. Rightmove suggests that new sellers may price more competitively during this quieter time of year, but there is a degree of buyer buzz missing from last year’s peak-mortgage-rate market.
The first Bank of England rate cut in four years has accelerated mortgage rate drops and improved buyer demand, setting up a positive autumn market. Rightmove has raised its 2024 forecast from a 1% drop to a 1% rise in new seller asking prices.
Tim Bannister, Rightmove’s director of property science, says that the rate cut has sparked a late summer boost in buyer activity. Since the rate cut on August 1, the number of potential buyers contacting agents is 19% higher than the same period last year.
So, while landlords may be eyeing the exit, the overall market is looking up for buyers and sellers alike. Here’s to a bustling autumn season!
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