Last year turned out to be quite a year for Buy to Let investors. We saw the 3% increase in stamp duty for second homes and investment properties and investors have started to feel the sting of the Government’s attempt to pursue this sector of the property market for increased revenue. Conveyancers will remember the end of March 2016 and the efforts made to meet their clients’ requirements to exchange and complete before the new stamp duty land tax higher rate began to apply.

The Bank of England Regulation Authority introduced new lending criteria rules, following on from a continuing increase in the number of defaulted loans, which saw even the seasoned investor having to talk through their cash flow and spending habits. One long term client said: "I was asked how much I'm likely to spend on new clothes in the next year" despite already having a large property portfolio behind them.

Then of course there was 'Brexit'. Just when investors were already feeling the pinch, the referendum result caused major ripples in the property market, with both buyers and sellers putting a 'stall' on things until they could weigh up what the result meant for them. In the days following the referendum we saw deals falling through or being stalled and buyers requesting significant price reductions. The market has now settled but six months on, there is no certainty about what is going to happen during the negotiation period and after we leave the EU.

So how does 2017 look? The general consensus between conveyancers is that there is still a good amount of life in the local and London property market, with steady instructions coming in throughout January. The Buy to Let market is certainly still feeling the pinch, but the New Build Help to Buy scheme, providing a loan of up to 40% on New Builds in certain areas, seems to be gaining pace with first time buyers.

In April 2017 we will see the reduction on mortgage tax relief introduced, with investors having relief for financial costs restricted to the basic rate of income tax. Top rate tax relief of 45% will be slashed to 20% over a four year period. This combined with the remaining effects of the higher rate of stamp duty land tax, and Brexit, there is no doubt that some impact will be felt on the Buy to Let market. Any inexperienced investor is warned to seek the advice of an experienced accountant.

But perhaps there is some hope? With the potential of fewer investors looking for loans, we may see lenders react by offering more competitive deals in a bid to sweep up as many new loans as possible. Landlords may find themselves with better rates being offered than prior to last year. With remortgages on the steady increase, and second time buyers looking to convert existing properties to a Loan to Let basis, perhaps we could see the banks providing a helping hand to investors?

In addition the Royal Institute of Chartered Surveyors have suggested that rental prices could rise faster than house prices over the next 5 years as there are likely to be more tenants chasing fewer rental properties.

Whatever 2017 brings, whether you’re looking to invest in the Buy to Let market for the first time or a seasoned 'pro', an experienced conveyancer can make the purchase of the investment property a lot easier for you. Dean Wilson can offer you this service. For more information don't hesitate to contact Karl Post or Siobhan Cox at Dean Wilson on 01273 249200.