HMRC figures show large rise in sales thanks to Stamp Duty levy
The chancellor's bid to curb spending on buy-to-let properties in the UK saw a large surge in house sales in March as landlords rushed to beat the deadline, new figures released by HM Revenue & Customs (HMRC) have confirmed.
According to the official data, house sales increased in March by 75 per cent when compared to the volume of homes that were sold in February. Similarly, when compared to the same month just a year ago, HMRC said that March's house sales were 77 per cent higher.
Previously, anecdotal evidence and expectations from estate agents had suggested that there would be a rise in the number of landlords investing to beat the new three per cent Stamp Duty levy that kicked in at the start of this month. However, this official data confirms this, with no other real reason for such an immediate rise in sales in a single month.
"The large increase in transactions for March 2016 is likely to be associated with the introduction of the higher rates on additional properties in April 2016," the HMRC report says.
"Additional non-tax factors may have played a role as well, for example the Bank of England's plans to curb buy-to-let mortgages resulting in a rush to purchase," it went on to add, before explaining that this quick rise is expected to rectify itself in the coming months, with the Stamp Duty levy likely to have an immediate effect on sales as fewer landlords look to invest in a time when costs are higher.
Lucian Cook, Savills head of residential research, also said that the data shows landlords have been spending cash on properties rather than borrowing to do so, showing a real desperation to have deals finalised in shorter periods of time.
While sales rose by 77 per cent year-on-year, mortgage lending was only up 59 per cent, suggesting that many landlords are spending cash on properties in 2016.
"All these figures confirm a frenzy of buying activity before the April 1stl introduction of the three per cent Stamp Duty surcharge for additional homes purchases," Mr Cook added.