UK house prices: Buy to let investors are swarming the property market ahead of April’s surcharge, but supply is actually rising
Buy to let investors are clearly getting their houses bought before the new surcharge rules come into place: new figures show a 35 per cent surge in buyer activity as supply fell eight per cent.
According to estate agent Haart, there were 15 buyers for every new property that came on the market in January.
But despite that, the average house price actually fell 3.9 per cent month-on-month – though it is still up 10.9 per cent on last January.
First-time buyers saw no let-up in price movements, however, up 2.3 per cent month-on-month and up 6.8 per cent for the year. London house prices were also still on the rise, up 0.9 per cent on December and 18.9 per cent for the year.
Paul Smith, chief executive of Haart, said buy-to-let investors were "responsible for a large proportion of this rise in anticipation of the stamp duty surcharge".
He added: "This high level of activity has resulted in a substantial backlog of homes in the pre-completion stages, and we’re now seeing a shortage of conveyancers and lawyers to progress these sales, leading to delays and a subsequent decline in the number of completions in January.
“London is also seeing a high level of activity and finally the issues surround the supply of homes is starting to ease with a 20 per cent increase in instructions registered compared to last year.
"In fact supply is now beginning to outpace demand which is up by 14 per cent over the same time period. While this increase is very welcome, we are still seeing nearly 21 buyers for every instruction despite the slow-down at the top end of the market."
Once the buy to let surcharge is introduced in April, the number of investors is obviously expected to drop off – but Smith noted that this would most likely just pave the way for first time buyers to take the stage as there will be "less competition for homes".