£29m paid in Stamp Duty by Maidenhead Residents

“A pound saved is worth two pounds earned . . . after taxes” is what my Grandfather used to say. He loved his irony, yet was always a wise man, and it is tax I want to talk about today, in particular, property taxation .. Stamp Duty in fact.

Apart from some minor exemptions, Stamp Duty is paid by anyone buying a property over £125,000 in the UK. It presently raises £10.68bn a year for the HM Treasury (interesting when compared with £27.6bn in fuel duty, £10.69bn in alcohol duty and £9.48bn in tobacco duty).

In the latest set of data from HMRC, in the MP constituency that covers Maidenhead, property buyers paid £29m stamp duty in one year alone – a lot of money in anyone’s eyes (although not as much as the £660m in income tax that all of us in the same area paid last year).

However, as you may know, George Osborne introduced an additional tax for landlords and from 1st April 2016 they had to pay an additional 3% stamp duty surcharge on top of the normal stamp duty rate when purchasing a buy to let property. There were tales of woe and Armageddon with a report by Deutsche Bank suggesting that the new surcharge could see house prices fall by as much as 20%.

HMRC data released in the Summer for Quarter 2 (Q2) of 2016 did seem to back up those fears as they published some worrying figures; only one in seven properties purchased was a second home or buy-to-let (in real numbers, only 30,300 of the 207,900 properties in Q2 were bought by landlords).

In previous articles, I spoke about the slump of property transactions after the 1st of April (as landlords rushed through their property purchases in March to beat the April deadline). In Q2 of 2016, £1.976bn was raised in Stamp Duty from Residential Property. Of that £1.976bn, £652m was paid by buy to let landlords (£424m in normal stamp duty and £228m in the additional 3% surcharge).

However, looking back at Q3, the numbers improved significantly. Of the 235,000 property sales, nearly one in four of them (56,100 to be precise) were bought by buy to let landlords and of the £2.208bn in stamp duty, £864m was paid in ‘normal’ stamp duty by BTL landlords and an impressive £442m paid by those same landlords in the additional stamp duty surcharge.

The statistics suggest buy to let investors have thankfully not been deterred by the stamp duty surcharge introduced in April this year. The figures also show that 65.4% of "buy to let" purchases cost less than £250,000, 23.7% of properties were in the £250k to £500k range and 10.9% (or 6,100 additional properties) of buy to let properties bought cost over £500k – interestingly nearly one in four (22.2%) of £500k properties purchased in Q3 were buy to let properties.

It just goes to back up what I stated a few weeks ago when I suggested that many investors had rushed to make purchases before 31st March, making figures in the following months (Q2) artificially low when the 3% supplement was introduced, but in Q3 the number of buy to let properties purchased increased by 85%.

It just goes to show you shouldn’t believe everything you read in the newspapers! I can assure you the Maidenhead property market is doing just fine. For more thoughts on the Maidenhead Property Market like this .. visit the Maidenhead Property Market Blog 

St. Marks Road, Maidenhead - 2 bed semi - Full Renovation Required!

Good morning, if you are a viewer of all these property programmes and fancy getting involved yourself then this place on St. Marks Road is worth looking at. The pictures speak for themselves in terms of the work involved! I think you should be thinking long term with this one and the capital growth a place like this can offer. Yes the Maidenhead property market has seen a holt in the level of growth in recent months, but it is certainly not seeing a decline and I fully expect things will pick up again. In November property prices increased by 1.6% alone, I don't expect this trend to continue but is shows Maidenhead is an extremely buoyant market and longer term you can expect to get a good return on properties in this area of town!

Its on the market with Braxton for £550K - more pics and details on the link below.

http://www.zoopla.co.uk/for-sale/details/42759220

Bucklebury Close, Holyport - 3 bed link detached - Village Location!

Hello, just seen this place come on the market with Romans for £430K. Some investors and landlords don't always think of village locations when purchasing their next investment property, but this place I think should be considered. With Holyport College setting up close by I am getting more calls from prospective tenants who are specifically looking specifically for a place to rent in Holyport - in terms of rental income then you could expect to achieve around £1,500 PCM and with strong capital growth this may well be worth investigating further!

More details below.....

http://www.zoopla.co.uk/for-sale/details/42741756

Average Rent Paid by Tenants in Maidenhead rise to £1,574 per month

Back in the Spring, there was a surge in Maidenhead landlords buying buy to let property in Maidenhead as they tried to beat George Osborne’s new stamp duty changes which kicked in on the 1st April 2016. To give you an idea of the sort of numbers we are talking about, below are the property statistics for sales either side of the deadline in SL6.

• Jan 2016 – 118 properties sold
• Feb 2016 – 104 properties sold
• March 2016 – 181 properties sold
• April 2016 – 58 properties sold
• May 2016 – 58 properties sold

Normally, the number of sales in the Spring months is very similar, irrespective of the month. However, as one can see, this year was a completely different picture as landlords moved their purchases forward to beat the stamp duty increase. You would think that even with a basic knowledge of supply and demand economics, rents would be affected in a downwards direction?

However, there appears to be no apparent effect on the levels of rent being asked in Maidenhead - and more importantly achieved - and this direction of rents is not likely to inverse any time soon, particularly as legislation planned for 2017 might reduce rental stock and push property values ever upward. The decline of buy to let mortgage interest tax relief will make some properties lossmaking, forcing landlords to pass on costs to tenants in the form of higher rents just to stay afloat. Even those who can still operate may be deterred from making further investments, reducing rental stock at a time of severe property shortage.

.. but it’s not all bad news for tenants. Whilst average rents in Maidenhead since 2005 have increased by 22.6%, inflation has been 38.5% over the same time frame, meaning Maidenhead tenants are 15.9% better off in real terms when it comes to their rent (which is a sizeable chunk of most people’s monthly household budgets)

Year	Average Rent in Maidenhead per month
2005	£1,283
2006	£1,313
2007	£1,342
2008	£1,387
2009	£1,408
2010	£1,388
2011	£1,422
2012	£1,454
2013	£1,475
2014	£1,497
2015	£1,531
2016	£1,574

I found it particularly interesting looking at the rent rises over the last five years in Maidenhead, as it was five years ago we started to see the very early green shoots of growth of the Maidenhead economy.  As a whole, following the Credit crunch (2011), rents in Maidenhead had rose by an average of 2.4% a year – fascinating don’t you think?

The view I am trying to portray is that while renting is often portrayed as the unfavourable alternative to home ownership, many young Maidenhead professionals like renting as it gives them adaptability with their life. Rents will continue to rise which is good news for landlords as buy to let is an investment but, as can be seen from the statistics, tenants have also had a good deal with below inflation increases in rents in the past. It’s a win-win situation for everyone although on a very personal note, it’s imperative in the future that tenants are not thwarted from saving for a deposit by excessive rental hikes – there has to be a balance.

The Farthingales, Maidenhead - 3 Bed Terrace - Long Term Investment Opportunity!

Good evening! I like the look of this 3 bed terrace in the Farthingales! It's on the market with Roger Platt for £490K, which maybe getting towards the top end of most investors budget but I think there is a great opportunity for some capital growth. The market in Maidenhead has certainly levelled off but when things start to pick up again (and they will) then this part of town will really see the benefit. I keep mentioning that investing in Maidenhead is a long term strategy and this property certainly falls into that category.... just to give you an indication house prices for similar properties in the area have gone up over £100K in the last 10 years! 

http://www.zoopla.co.uk/for-sale/details/42601660