Quest report BTL survey instructions down by 40% on FebruaryMake Text Bigger
The Quest Survey and Valuation reporting systems are the most widely used by surveying firms across the UK reporting back to lenders and customers. They are therefore in one of the best positions to report on activity in the Buy to Let market as a valuation survey is only instructed once a mortgage has been agreed and is likely to proceed.
The figures have to be considered in the background of the rush to complete Buy to Let properties before the 3% Stamp Duty surcharge on second properties deadline started 1st April. There was a large increase of survey instructions peaking in February to give a chance for property purchases to complete before the 1st April.
Then by March, when it starts to become difficult to complete before the deadline, survey instructions drop by 30.6% against the February peak and in April, post Stamp Duty surcharge, survey instruction fell by 40%.
Quest is predicting Buy to Let instructions to remain low during May and is monitoring the market for potential threats to manipulating purchase prices and values. These threats can occur when demand falls in a market to try and buck the consequent downward pressure on prices. In this case the fall in demand is being caused by planned decreases in mortgage interest tax relief and the above mentioned stamp duty surcharge on second properties.
MD of Quest, Peter Stimson, said “with any significant changes like we have seen with the Stamp Duty rules, we do typically see a change in behaviour.
“Currently, we are seeing a sharp rise in the number of new build developments either offering Stamp Duty paid deals or appearing in property clubs offered at discounted rates.
“Particularly worrying is that rather than just one or two properties at the end of a development phase, in some instances we are now seeing entire developments appearing for sale under value.
“Lenders and surveyors really need to do their due diligence and be fully aware of such incentives and schemes to manage and control the risks associated with these.”
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