10.52% slump in Dundee City Centre Property Transactions
In this post credit crunch world of sub terrain low interest and annuity rates so low a limbo dancer would smart, the growth of buy to let since 2009 has been phenomenal. So much so, there has been an evolution in purchase of property in the UK from that of just buying the roof over one’s head to that of a buy to let investment where it is seen as a standalone financial asset to fund current and future (i.e. pensions) investment. So recently, a few days before the release of latest Land Registry data of property transactions, quite a few market commenters were anticipating a huge increase in the number of properties sold in January as the 1st of April 2016 stamp duty deadline got closer.
Looking at the most recent set of data from The Land Registry, it seems there has been a rise in the number of completed property sales in the Dundee City Council area. Year on year, completed property sales in January (the latest set of data released) rose by 32.2% to 509 compared with 385 in January 2015. Nationally though the number of completed house sales fell by 5% in January 2016 compared with January 2015. So, some might say this bucks the trend that there was a rush by landlords to buy ‘buy to let’ property ahead of the 1st April 2016 deadline …
But, looking closer to home though, in the DD1 postcode in January 2016, 17 properties changed hands, whilst 19 properties did so in January 2015. It’s even more interesting when you look at the average price paid, in January 2016, it was £114,018 yet in January 2015, the average price paid was £116,500.
Is the buy to let dream over for Dundee landlords?
.. but as ever my Dundee Property Blog readers, the devil is in the detail. The 3% stamp duty surcharge for buy to let landlords was announced in the Autumn Statement on the 25th November 2015. Anyone who has bought a property knows from their offer being accepted to receiving the keys and monies paid is a long drawn out affair, taking on average 8 to 12 weeks, as the Land Registry only get notified upon completion of the sale. We also need to factor in that Solicitors seem to have the last two weeks of December off anyway.
So if there was a rush in the last few days of November/early December in the Dundee property market, we would only see the results of that in the February figures (released in June) and more probably March’s (released in July).
So why all the doom and gloom? Simple .. bad news sells newspapers and gets the headlines. Let’s be honest, the headline to this article is designed to be eye catching. However, when we look at both the bigger and smaller picture; nationally, property values dropped (month on month) by 0.5%; in Scotland they fell by 0.35%, whilst in Dundee they rose by 3.8%. The year on year figures tell a completely different story to that.
It just goes to show you should look deeper into something before making a judgment!