Ian Harris MNAEA MARLA – Associate & Branch Manager at Watsons Property was interviewed by Nick Conrad on his breakfast show this morning. Ian was discussing the recent tax changes, stamp duty and the effects on landlords in the general property market.
Interview with Nick Conrad on BBC Radio Norfolk (7am, 12 February 2018)
Nick Conrad – Are there any signs now that fewer landlords are carrying forward Buy To Let?
Ian Harris – There’s not too much happening in the market overall. However, there are changes going on – some landlords are moving out, and some landlords are moving in.
Nick Conrad – There is a churn in the market at present, which is to be expected, but are you seeing any signs that landlords are selling up their stock of property because of changes in tax relief and exiting this type of business model?
Ian Harris – Not because of the tax changes, no. There are landlords selling up, as there are all of the time (some retiring from the market, some leaving as it’s the right time to do so for them). Some of the properties being sold off are being bought up by other landlords. We probably have a net stable stock of rental properties currently.
Nick Conrad – Are you looking at the story we’re broadcasting this morning and saying, in your experience, you don’t really recognise the trend that is being suggested by financial experts?
Ian Harris – No we’re not, and that’s a surprise for us as well because with these tax changes coming into effect, there had been some expectation that it would have started to have happened by now.
Nick Conrad – So you’re going to tell me that the housing market is healthy at the moment I’m sure, but if I asked you to give me an honest assessment of where we are at the moment with the housing market, what would you say?
Ian Harris – I think the current housing market is in a state of transition. Buy To Let had been growing had been growing at a rapid rate of knots. I think the tax changes reflect concern by the Government that it was racing too much in a particular direction. The changes to Stamp Duty just before Christmas 2017 gave first time buyers a stamp duty holiday (First time buyers are now stamp duty exempt up to £300,000)
Nick Conrad – Are we seeing the effects of that? Let’s pick this apart a little bit. In 2015, George Osborne was the Chancellor, tax relief on landlord’s mortgages is going to be reduced over several years, stamp duty on properties that they buy is going to stop people just investing, taking up housing stock and pushing them back out to market for first time buyers. This, coupled with attractive incentives to get people investing in bricks and mortar, we should see the great transfer of power from the wealthy who have property portfolios to those who are just trying to buy for their own domestic use. Has that happened?
Ian Harris – It is definitely in the process of happening. NAEA Propertymark picked up in December 2017 a 32% in First Time Buyers registering, and the Government’s Help To Buy scheme (which has largely helped First Time Buyers) has kicked off as well. We’re seeing many more First Time Buyers registering in Norwich, and other parts of the county too.
Nick Conrad – Are the Government going too far here though? Tax changes, relief on landlord’s mortgages; the view of some is that this is going in the wrong direction. There are some who have been in this market and made money out of it for quite some time. Has the Government gone too far because we do need to have a healthy level of housing stock that people can rent.
Ian Harris – We certainly do. The population needs flexible accommodation; not everyone wants to commit to the long-term commitment of a mortgage or investment of buying a property, and others are not in a position to do so – and prices have gone up, so high! My view is that the Government does need to keep an eye on this because everybody needs to live somewhere, and home ownership is not the right thing for everybody.
Nick Conrad – Are you also in the lettings market at Watsons?
Ian Harris – Yes we are, yes.
Nick Conrad – OK. In terms of the balance, have you seen any change? Have you seen a flux from one side of the business to the other or is there equilibrium between the two?
Ian Harris – There are certain points in the year when it is very noticeable. In early 2016 there was a definite migration – we had a noticeable amount of notices being given by tenants, and they were leaving to buy property.
Nick Conrad – Thank you for your time this morning Ian. Much appreciated.
If you’re a landlord and need some further guidance, check out Government info: Help & Support for Landlords.
You can listen to the whole of Nick Conrad’s BBC Radio Norfolk show on BBC iPlayer.
