Buy to let investors are storming the housing market to beat higher taxes that will come into force in April.
In February, 85 per cent of estate agents reported an increase in the number of buy to let investors looking to purchase properties, according to data released by the National Association of Estate Agents (NAEA) released today.
There were an average of 463 house hunters registered per branch – the highest since August 2004.
First-time buyers made up 24 per cent of total sales made over the month, down from 31 per cent the month before.
From next week, buy to let investors and anyone buying a second home will have to pay a three per cent surcharge on their stamp duty land tax. The measure was announced in chancellor George Osborne's autumn statement last year.
“It is evident from February’s report findings that we’ve seen a real sense of urgency from landlords trying to complete on sales ahead of the stamp duty reforms– which now come into force next week. However, the mounting pressure and increased demand for housing has meant that first time buyers have had to compete with landlords for property and as a result they have lost out,” said NAEA managing director Mark Hayward.
However, the market is unlikely to dramatically improve for first-time buyers after April. Hayward added:
“We would like to say that come April things will look better for first time buyers. Schemes like the Help to Buy ISA, Help-to-Buy scheme and the new Lifetime ISA all sound great on paper, and there’s no doubt that some young people will definitely benefit from them. The crux of the problem though is that there is still a huge issue with supply and until we build more homes, and crucially the right sort of homes, we cannot fool ourselves into thinking we are doing enough to help people buy their own home.”
|Purchase price of property||Rate of Stamp Duty||Additional home rate (from April)|
|£0 to £125,000||0%||3%|
|£125,001 to £250,000||2%||5%|
|£250,001 to £925,000||5%||8%|
|£925,001 to £1.5m||10%||13%|