Fewer than half of all homes sold in central London over the last three months went to regular homeowners, a new report has shown, casting a light on the extent of the housing crisis in the capital.
Buy to let landlords accounted for 36 per cent of property transactions during the first three months of 2015, according to estate agents Marsh and Parsons. A further 23 per cent went to people buying a second home.
Just 41 per cent of all homes sold in “prime London” — an area which roughly covers zones one and two — were bought by people who intended to actually live in them as their main residence.
The figures mark a sharp increase in the dominance of investors in the London property market — up from 40 per cent of all transactions in the final quarter of 2015 to 59 per cent between January and March.
Analysts suggested the spike was accounted for by the introduction of a three per cent stamp duty surcharge for second home purchases which came into effect on 1 April.
Figures from the Council of Mortgage Lenders and the British Banking Association (BBA) have both shown a sharp increase in mortgage applications in the first quarter of the year. The total amount lent for house purchases across the UK jumped by 64 per cent in March to £17.1bn – a single-month post-crisis high according to the BBA.
A separate report out by estate agents Haart showed that it was first-time buyers who lost out across the UK – down three per cent in March – as buy to let investors rushed into the market.
Experts said that the balance would tip back towards owner-occupiers over the rest of the year. “This was by no means a typical quarter,” David Brown, chief executive of Marsh and Parson said.
“Second-home owners really jumped to it this spring, and were much more prominent in the market than we would typically expect,” he added.
The number of registered buyers for every home climbed from 12 this time last year to 14, while the average property price in central London increased by 2.6 per cent to £1.6 million.