CGT hike sparks panic-selling
Buy-to-let investors with properties that have been on their books for a number of years are said to be off-loading quickly. They are trying to avoid being taxed at 40% or even 50% rather than the current capital gains tax level of 18%.
As reported last week the emergency budget on 22nd June seeks to make this rise, although whether it will actually transpire is another matter. A major sell-off will mean extra losses as landlords insurance policies are handed in before the end of their term.
The sell-off may flatten the recent price rises that have happened in some areas. But in regions where buyers can afford property, and lenders are prepared to lend, there is pent up demand that will absorb the stock. In addition the low value of sterling continues to make the UK buy-to-let market attractive to overseas buyers.
One way or the other it looks like upheaval is on the way. If BTL investors do hand in their buy-to-let insurance policies early they will only get a portion of the unused period returned as there are deductions for administration at the beginning of the period.
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June 11th 2010