Towards the end of last year (2015) into 2016 buy-to-let purchasers rushed to secure properties before a new 3% tax on second home purchases will be introduced. Subsequently this influx of buyers has significantly impacted the market. The rate at which house prices increase has almost doubled compared to the months before this tax was announced.
In February alone the average property prices increased around 0.8% which equates to an average of £2000 per property. Year to date there was an increase of 6.2% on average house prices across the UK driven almost entirely by landlords trying to buy housing before this tax is brought in.
“Growth could be as a result of buy-to-let investors rushing to complete quickly to avoid April’s additional three per cent Stamp Duty surcharge, which has also seen sales shoot up 12 per cent since January,” said Richard Sexton, director of E.Surv chartered surveyors.
Although prices have increase there have been more properties on the market than usual. Sellers know that the demand from second home buyers/ property investors means that now is the best time to sell their property.
While there will be an increase in tax on second home purchases from April the rate of house price growth should start to slow down. This could mean that if you are looking to buy after April although the stamp duty is higher the overall price of the house could be lower.
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