Figures from estate agents confirm that there has been a rush from buy to let investors ahead of the new stamp duty deadline for additional homes in the UK.
In February some 85% of estate agents reported an increase in the number of buy to let investors flooding the market to beat the stamp duty changes which come into effect on 01 April, according to the latest housing report from the National Association of Estate Agents (NAEA).
The Chancellor’s announcement around stamp duty for additional homes made in last year’s Autumn Statement meant that in January and February this year 72% and 85% of agents respectively, saw an increase in interest from those hoping to purchase second homes.
This meant that with added pressure from buy to let investors on the market, demand for housing was the highest level for 12 years in February.
Indeed, the data shows that there were an average 463 house hunters registered per member branch, the highest since August 2004 when 582 were registered per branch. This is following an increase in January when estate agents reported 453 per branch, the highest since July 2015.
The number of properties available per branch increased marginally from 33 in January to 35 in February, as the number of sales agreed per branch in February increased too. There were an average nine sales completed in February, back to the level seen in October 2015 and a rise from eight sales agreed per branch in January.
The report also shows that 24% of total sales made in February were to first time buyers, a decrease of 5% points from January, as mounting pressure from buy to let investors increased competition.
‘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,’ said Mark Hayward, NAEA managing director.
‘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,’ he pointed out.
‘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,’ he explained.
‘But 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,’ he added.