Around half the homes sold in the run up to the end of the financial year were deals by property investors racing to beat the new rise in stamp duty.
The figure was a huge increase compared to the 18% of all homes bought and sold in March 2015, says estate agent Countrywide, one of the UK’s leading property sales firms.
The firm reckons homes worth £28 billion exchanged hands in the final two weeks of March 2016 – an increase in value of 76% over the same period last year.
From April 1, property investors pay a 3% stamp duty surcharge on homes valued at £40,000 or more in England and Wales. A similar charge is levied on property purchases in Scotland under the Land and Buildings Transaction Tax.
Countrywide also reckoned buy to let landlords accounted for 23% of homes sold, compared to 13% a year earlier.
As a result of the surge in purchases by landlords, an extra 22% more properties were available to rent in the first quarter of 2016 than Q1 in 2015.
The result has been extra supply has pushed rents down as demand has not increased in line with the number of available homes, although the number of tenants registering in the first three months of the year was 16% up on Q1 2015.
London saw the biggest surge in homes to rent in the first quarter of 2016 – up 40% although the number of tenants only rose by 8%.
As a result, rents increased 2.9%, compared with 7.4% last year, said the firm.
Across the UK, rents were up 3.4%, compared with 5.1% in 2015.
‘Quite at odds with the intentions of the policy, the first measurable effect of the introduction of the new stamp duty rate has been to increase the number of homes owned by landlords, although this will likely be a temporary affect as we see reduced investor activity in future months,’
said Johnny Morris, research director at Countrywide.
‘The increase in supply of homes to rent from landlords bringing forward purchases seems to have taken the edge off rental growth. A similar increase in tenants looking for a home to rent though would indicate this may not persist.”
