Stamp Duty hike likely causes storm before the calm
The flood of property investors rushing to beat this month’s Stamp Duty Land Tax increase is likely to calm down in coming weeks, research suggests.
From this month, a three per cent surcharge is set to be introduced on buy-to-let properties and second homes.
Many people were desperate to complete their transaction before the changes came into force at the start of this month, which has led to a sharp increase in mortgage applications.
Nationwide believes that landlords have fuelled a surge in mortgage approvals at the start of 2015, with almost 75,000 agreed in the first month of the year alone.
Robert Gardner, chief economist with the mortgage lender, said: “Much of the increase is likely to be related to the impending increase in Stamp Duty on second homes.
“This is likely to have brought forward a significant number of purchases, which in turn will probably result in a fall back in approvals during the spring/summer.”
It is thought that the initial flurry of approvals will be followed by a rather cooler period for the property market over the summer months.
That said, property prices are still expected to grow by around eight or nine per cent over the course of the year.