There has been a surge in buy-to-let activity as investors look to beat the April stamp duty deadline.
According to Connells Survey & Valuation, the number of buy-to-let valuations in February rose by 34% compared to the same month last year, while remortgaging activity jumped 41%.
Buy-to-let activity increased 25% on a monthly basis, compared to 6% for remortgaging.
The 3% increase on stamp duty is set to take effect from 1 April as part of the government’s attempt to curb the buy-to-let market and free up property for first-time buyers. The basic rate of tax relief landlords can claim on properties is also set to fall to 20% from April 2017.
John Bagshaw, corporate services director of Connells Survey & Valuation, said: “Buy-to-let investors and those remortgaging with the aim of buying a second home are racing against the clock. Activity from both these groups is picking up pace on a monthly basis as the 1 April stamp duty deadline looms and people hurry to complete their transactions before being hit by the 3% surcharge on their buy-to-let property or second home.
“Expect this activity to reach a crescendo in March before calming in the second quarter of the year. Buy-to-let investors will be calculating the impact the Stamp Duty hike is having on their rental yields, while those thinking of remortgaging to fund a second home will weigh up whether it’s still financially viable for them to do so.”
The home mover and first-time buyer sectors also saw strong monthly rises in valuation activity between January and February, rising 36% and 35% respectively.
“Home movers are confident the strong but steady property price rises which typified 2015 are set to continue, and so feel confident that their home’s value will hold them in good stead as they endeavour to move up the ladder.
“Meanwhile, first-time buyers, whose personal finances tend to be particularly precarious, have become more conscious the economic good news of last year was not just a blip on the radar, but the start of a longer-term trend. This has given many of them the confidence to put down their first deposit and apply for their first mortgage.”
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