Effects of budget on BTL market likely to be minimal, predicts Belvoir’s Mike Goddard
As the dust begins to settle on George Osborne’s emergency budget, Mike Goddard, founder and CEO of Belvoir predicts a minimal impact on the buy to let market.
In a pre-budget statement, when rumours of a 50% increase in Capital Gains Tax (CGT) had sparked fears of a sudden sell-off of second homes and investment properties, Mike had advised landlords to adopt a wait and see policy rather than rush to sell. This advice proved to be sound as the Chancellor revealed a more modest rise in CGT from 18% to 28%.
“A 10% rise in CGT was certainly not as swingeing as was feared,” confirmed Mike, who remains optimistic that investment landlords will continue to look towards long term rental yields.
He said: “I am confident that this rise will not really affect the buy to let market very much. In my experience most investment landlords tend to rely more on the rental yield they receive from a property rather than the long term capital appreciation and I think the rise in CGT will not have a major negative impact on the market.
“There was further good news in the budget for the 140+ Belvoir offices around the country, as corporation tax for small businesses will reduce from 21 to 20%. This may not seem very much, but every little bit helps. For larger businesses with turnover of more than £300,000 corporation tax will fall by 4% over four years to 24%, which is good news.”
In summing up the emergency budget Mike said: “All in all, the budget was fairer and not as bad as it might have been. The rise in VAT from 17.5% to 20%, due to come into effect next January will undoubtedly affect everyone, and from Belvoir’s point of view landlords and tenants will have to pay a little more in fees, but in the long term I am sure this won’t have too much of an adverse affect and I am hopeful that the market can now continue to stabilize.”
For further information, or to request an interview with Mike Goddard please contact Andrea McHugh, tel: 01476 567438, 07940 930 331 or email: andrea@headlinesjournalism.co.uk
