The UK’s buy-to-let sector has experienced a surge of activity as investors rush to complete their transactions before the new stamp duty surcharge kicks in, according to a firm of surveyors.
According to Connells Survey & Valuation, in February the number of buy-to-let valuations carried out rose by 34% compared to the same month last year. Meanwhile, remortgaging activity – which includes buy-to-let remortgaging activity – jumped 41% over the same period.
In addition, buy-to-let activity saw a month-on-month increase of 25%, while remortgaging volumes climbed 6% in February compared to the previous month, largely driven by buy-to-let remortgaging.
The news comes as a 3% stamp duty surcharge on second homes or buy-to-let properties is due to take effect on transactions completed after 1 April 2016.
John Bagshaw, corporate services director of Connells Survey & Valuation, said: “Buy-to-let investors and those remortgaging with the aim of buying a second home are racing against the clock. Activity from both these groups is picking up pace on a monthly basis as the 1 April Stamp Duty deadline looms and people hurry to complete their transactions before being hit by the 3% surcharge on their buy-to-let property or second home.
“Expect this activity to reach a crescendo in March before calming in the second quarter of the year. Buy-to-let investors will be calculating the impact the stamp duty hike is having on their rental yields, while those thinking of remortgaging to fund a second home will weigh up whether it’s still financially viable for them to do so.
“But behind these somewhat frantic figures there is an underlying story of steady, long-term growth. Despite taking some political heat recently, the buy-to-let market continues to attract investment off the back of its potential returns, while the remortgaging sector remains popular with those looking to get a better mortgage or release capital on their home for investment purposes.”