Buy-to-let investors in the UK and those looking to own a second property were frantically snapping up housing in a bid to beat the increase in stamp duty, which came into effect on 1 April. According to the National Association of Estate Agents (NAEA), the increase of 3% (which only applies to additional residential properties) has led to 85% of its members reporting an increase in the buy-to-let sector during March this year, raising demand for property to a 12-year high.
Although estate agents may be smiling, first-time buyers may not be as enamoured with the situation. The NAEA noted that, although there were an average of 463 buyers per branch in February, only 24% of these were purchasing homes for the first time – a 5% decrease month on month.
The increased demand for housing has meant that those entering the property market for the first time have had to compete with established landlords. As a result they have lost out, says NAEA MD Mark Hayward. He raises a good point. Investment and buy-to-let purchasers generally pay cash, which is understandably a far more attractive option for sellers.
The UK has a number of schemes aimed at helping those climbing onto the property ladder for the first time, however. Help to Buy ISA, the Help to Buy scheme and Lifetime ISA will be beneficial, says Hayward.
Words Lea Jacobs