Investors are hoovering up all first-time buyers’ houses, says agent
Tuesday 12th May 2009, 2:29PM BST.
INVESTORS are making it more difficult for first-time housebuyers, according to one property professional.
‘Cash investors are hoovering up the bottom end of the market,’ said Alpha Estates director Dave Ingrouille (pictured).
‘Somewhere in the region of 60-70% of first-time buyer level properties are being taken by investors. It is almost a defensive investment strategy for a lot of people.’
He said that might be a result of the States’ decision to do away with dwellings profits tax.
‘Before, they had to hold on to it for years but now then can sell on after a day.’
The tax was introduced in the 1970s to combat property speculation but was suspended after a vote in the States in January.
The Treasury and Resources Department said that it was not effective either in terms of the cost of administering it or in achieving its objective.
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Well done Dave Ingrouille for sticking your neck out and highlighting this practice. It is also helpful to see some statistics to back it up although I would be keen to know the source.
Although completely legitimate, this practice will cause difficulties for low income families as well as first time buyers – along with the practice of upgrading properties to a level beyond the means of the low income / first time buyer bracket.
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Ove the last few years a number of developments have been listed as first time buyer properties to help push them through the IDC and have then changed into expensive flats which first time buyers have no chance of affording.
The states shoudl provide some sort of incentive to register houses as first time buyer properties which would have certain restrictions. Such as:
Must be the only property owned by the purchasor.
Must be their permanate dewellig
There are too many young people who have or are planning to move away from the island as they can’t get on the property ladder (myself included).
I know the price of houses is governed by economics (supply and demand of a limit resource) but something needs to be done to help people get their foot on the ladder.
Would a higher tax on second homes or investment propeties help to lower the demand?
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I agree with Paul Le P that it is good to see an Estate Agent actually telling it like it is for once.
In my opinion it is a shame that so many properties are bought to let. Great for the investors, as it’s an easy way to make £800/month without doing much.
But without some low price properties to buy, (I’m talking 120,000 tops). It seems to me that many people will never escape the rental market and will never be able to establish their own home in the island. Oh well, it will be the island’s loss when they realise the grass can be greener elsewhere.
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On the bright side, it brings much needed lower end rental properties onto the market.
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Nathan – I think there is a place for investors to buy to let. Many low income families will never be able to own property unless the market drops to such an extent to render property almost worthless. What does concern me is properties being bought to let then upgraded to a level well beyond the means of low income tenants in order to maximise profit. Personally I don’t support the notion that to own property is a right. I do however believe it is every islander’s right to have a roof over their head at an affordable rate and if that means that some investors lose out on a profit the so be it.
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This was going to happen as yields are so low elsewhere. If you have spare cash you are going to become a landlord.
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