As we look back on 2016, there were two factors which had a significant impact on the conveyancing marketplace. The first of these was the introduction of the additional Stamp Duty Land Tax levy, which largely affects the investor market. The new regulations meant that any property purchase, which resulted in the buyer owning two or more homes worldwide, and which completed from 1st April 2016, would result in an additional charge of at least 3% of the property value. Although there are some exceptions where the tax will not apply, for example if the purchase is to replace the buyers’ main existing residence, the impact on the market was extraordinary. In February, the Land Registry reported 67,867 house sales, whereas in March, where those affected were rushing completion to avoid having to pay the higher tax, these sales volumes increased exponentially to 117,255.
The new regulations are controversial, not least because they impact those who are not investors; a parent trying to help their child on to the housing ladder, for example, would be caught by the additional stamp duty cost if they were to purchase the property with their child but still owned their own home. In addition, the change has undoubtedly slowed down the investor market, with the Council of Mortgage Lenders figures confirming that the amount of Buy to Let remortgage loans are around 10% down from February 2016.
The second factor is, unsurprisingly, the result of the “Brexit” referendum in June. It is difficult to speculate how much of an impact the referendum has had, but the Land Registry figures suggest that the sales in July 2016 were 27% lower than the same time in 2015. Whilst this may be the case, we are now some months on from this period and thankfully the many contacts we work with suggest that both property listings and sales have recovered during the back end of the year.
As January draws to a close and our minds turn to considering what may happen in 2017, one really interesting statistic to digest is that gross mortgage lending reached £246 Billion in 2016, which is 12% up on 2015 and the highest figure since the economic crash in 2008.
