Agents reporting a rush from Buy-to-Let buyers before new stamp duty reforms
The 2106 budget announcement, first mentioned in the Autumn Statement, that additional homes would attract stamp duty at a starting rate of 3% for properties up to £125,000, 5% for properties sold at £125,000 to £250,000 progressing up to the highest figure of 15%. It can be seen that most buy to let properties will fall into the bottom two bands, which has prompted a rush to secure these properties before the April 1st deadline.
Now figures from estate agents confirm that buyers have been ensuring that the deals are completed before the new duty rates come into force. The figures show that 85% of agents have seen a rush from these investors, January and February of this year saw an increase in interest from those hoping to purchase second homes and the demand in February for housing was the highest level for 12 years.
To illustrate this, registrations from the National Association of Estate Agents (NAEA) show that there was an average 463 house hunters registered per member branch, which is the highest figure since July 2015. The problem still remains that lack of properties available has not been resolved, and although the number per branch increased very marginally from 33 to 35, supply and demand is still a huge issue.
Mark Hayward NAEA managing director, commented: “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.” He went on to say that with the pressure from buy-to let investors this has increased demand for housing and first time buyers appear to have lost out.
When the deadline passes it will take the demand off housing in the lower end of the market, which should mean that with schemes such as Help to Buy ISA, Help-to-Buy scheme and the new Lifetime ISA, young first time buyers will benefit.
However, until we build more homes, and crucially the right sort of homes, getting a foot onto the housing ladder will still be unattainable for many young people.