Buy-to-let purchases increase ahead of stamp duty changes
An increase in buy-to-let purchases ahead of the stamp duty changes from 1 April 2016 is raising prices.
In a survey by The Royal Institution for Chartered Surveyors (Rics), 74% of respondents expected to be an increase of purchases by buy-to-let investors prior to the changes.
The survey suggests that the rise in purchases is due to buy-to-let investors beating the deadline before the 3% stamp duty surcharge that comes into effect in April.
New buyer enquiries rose for the 10th consecutive month in January, with growth levels in enquiries accelerating for a second successful month.
Agreed sales have also risen over the month at the fastest pace since April 2014, while further increases are expected in the housing market.
The new stamp duty surcharge of 3% will be introduced from 1 April 2016 on purchases of additional properties such as buy-to-lets and second homes.
Simon Rubinsohn, chief economist at Rics, said:
“With buy-to-let investors rushing to get into the market ahead of the stamp duty hike, the near-term pressure on prices is intensifying despite a higher level of supply.
“How the tax changes planned for the buy-to-let sector over the next few years play out remains to be seen but there are concerns raised in the survey that some existing landlords will look to either gradually scale back on their portfolios or exit the market altogether as the more penal regime begins to bite.”
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