Buy-to-let buying frenzy continues to spiral ahead of stamp duty surcharge
Thursday 17 March 2016
The rush to buy second homes before George Osborne's new charges come into force has spiralled, according to new statistics.
With the introduction of the 3 per cent stamp duty hike now just a few weeks away, people are clambering to join the buy-to-let market according to the Council of Mortgage Lenders (CML).
Mortgages soared by a staggering 22 per cent in January compared to the same time last year.
CML say approximately 9,500 were taken out in the first month of the year, well up on the 7,800 from January 2015.
Financially, the total borrowed year-on-year increased by 40 per cent to £1.4 billion.
With homeowners remortgaging also reaching a high not seen since January 2009 - at £5.8 billion - experts say the eye-catching statistics are symptomatic of the changes that are afoot.
However, they predict the numbers could drop sharply once the stamp duty rise comes into force on 1st April, such is its unpopularity.
There has been a surge in buy-to-let activity
Simon Rubinsohn, chief economist of the Royal Institution of Chartered Surveyors, said: "Over the past three months, we have witnessed a surge in buy-to-let activity.
"Investors have rushed to purchase homes before the stamp duty surcharge comes into effect.
"It is inevitable that over the coming months, April’s stamp duty changes will take a little of the heat out of the investor market."
The stats should make for further uncomfortable reading for Chancellor George Osborne who continues to be hit with an onslaught of criticism over the stamp duty hike plans.
While it's purpose is to help first-time buyers get their foot on the property ladder, it's being regarded as a short-sighted move by many market experts.
Some suggest it will lead to a shortage of rented homes as buy-to-let landlords refuse to pay the hike and dump their properties.
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