Buy to let investors rush to beat stamp duty hike

The Royal Institution of Chartered Surveyors (RICS) said the level of new buyer enquiries increased for the tenth month in a row in January as the upward pressure on house prices intensifies.

It said feedback from its members suggests the recent surge in demand is due to a rush of buy-to-let investors looking to snap up properties before a three percentage-point increase on current stamp duty rates comes into force for these investors from April.

And three-quarters (74%) of surveyors expect to see a further increase in buy-to-let purchases before the changes kick in.

The UK housing market also saw a pick-up in the supply of homes in January - for only the third month in the last 18.

But the organisatoin said this was not enough to meet the growth in demand from buy-to-let investors - which is helping to push house prices higher.

London in particular saw a significant increase in the number of properties coming to market in January, although elsewhere the number of new properties was much “flatter”, the report said.

Even with the recent improvement to supply, a net balance of 49% of surveyors reported prices rising rather than falling in January.

Looking ahead, house prices are generally expected to continue rising in the next 12 months, with a balance of 72% of RICS members expecting prices to increase rather than decrease.

Generally, stock remains low, it said, with an average of 46 properties per branch, down by 21% compared with a year ago.