HMRC has reported a rush of second home purchases during March as landlords attempt to beat the increase to stamp duty. On the 1st of April, changes to stamp duty came into effect, adding a 3% tax to the purchase of second properties worth over £40,000. As a result, mortgage lenders, estate agents and HMRC have noted a surge of transactions in the run up to the deadline.
The HMRC data reported 141,000 transactions during March 2016 – double the number registered the year before, and the highest since before the decline in the housing market in 2007. Data collected by the Council of Mortgage Lenders also demonstrated an increase in lending: 59% higher than March 2015 and a 43% rise month-on-month. Property research experts described ‘a frenzy of buying activity’ before the tax changes came into effect as buyers looking to purchase a second property brought forward sales in March.
The new stamp duty rate follows a similar clamp-down on buy-to-let purchases in November, when tax relief for landlords was reduced from 40-45% to 20% – an attempt to level the field for first time buyers at risk of being nudged out of the property market by commercial buyers. Economists are now predicting a significant drop in sales following the April deadline, with an estimated 10,000 fewer mortgaged transaction each month for the rest of 2016.
If you’re thinking of buying or selling property in the Thames Valley during 2016, have a chat with the expert property solicitors at Frances Lindsay & Co or get a free conveyancing quote online.Tags: buy to let property Thames Valley, property and conveyancing