We've written before about stamp duty increases for buy-to-let properties. And as we approach April 1st, when the increases take effect, there has been a flurry of activity on the market. This has led to an increase in house prices, seen estate agents scrabbling to find properties, and boosted business at auction houses.
Buy-to-let stamp duty increases push prices up
The Halifax house price index showed that in the three months to January 2016, house prices rose by 2.2%. It's thought that this increase was largely driven by a surge in demand from would-be landlords trying to acquire properties before April 1st.
And although estate agents are working hard to meet the demand, there's a shortfall of housing available. Estate agents, Haart, have reported that buyer activity was up by 35% in January compared to a year ago, with supply only rising by 8%.
But the April 1st deadline is good news for auction houses. They are seeing a rush of business as buyers try to complete before the stamp duty increases take effect. The London-based auction house, Allsop, reported that it had 311 properties on its books for their February auction, which is up from 255 properties at the same time last year.
Buying at auction is particularly attractive to buy-to-let landlords as completion times are typically shorter. And when the gavel hits the block? The deal is legally binding.
Perhaps an unexpected consequence of this surge in demand for buy-to-let properties, is a shortage of conveyancers and lawyers to push the sale through to completion. The CEO of estate agent Haart, Paul Smith, reports,
"This high level of activity has resulted in a substantial backlog of homes in the pre-completion states...leading to delays and a subsequent decline in the number of completions in January."
As time starts to run out there are sure to be tense times ahead as buyers scrabble to complete before the stamp duty increases take effect.
Looking for a buy-to-let property? Give us a call to see what we've got on our books.