People looking to buy a home to live in are set to dominate the market in London as the winter rush to beat April’s 3% stamp duty surcharge for second homes and buy-to-let properties fades, with almost three times the number of people coming forward to register as buyers throughout February as in the previous month, according to Chestertons, a leading lettings and estate agent.
With the Chancellor unveiling the extra stamp duty charge in late November 2015, buy-to-let investors led a virtual stampede to purchase property in London before its introduction from April this year, pushing up prices and snapping up homes across the capital. Some predict demand – and prices – will slump as the effective deadline to complete those purchases is all but past, with the conveyancing process stretched to breaking point to get paperwork complete by the end of March.
However, those looking to buy a property to live in have merely been biding their time, according to Chestertons, with a huge surge in purchasers registering in recent weeks. Matt Johnson, Sales Manager at the firm’s Tower Bridge branch, says: “We had a very busy January, with investors outnumbering those looking to buy a home to live in. We recently sold a two-bed flat in the City Fringe for £80,000 over the asking price after just a few days on the market, which give some idea of just how competitive the market has been.
“However, through February we saw the number of people wanting to buy somewhere to live more than triple – many hoping that once the buy-to-let frenzy cools off and feeling the playing field will be a little more even once the 3% stamp duty surcharge comes in from April; sellers worrying that the market will flatten off needn’t worry, therefore, as demand seems as healthy as ever.”
Cory Askew, Executive Director at Chestertons, adds: “This is a trend we're seeing in the east of the city in particular and more generally across all of London. The desire and urgency of buy-to-let investors and second-home buyers to force their purchases across the line before the end of March did sideline other buyers, not least during the conveyancing process, which has been under huge pressure to get things completed before the end of this month.
“Meanwhile, the majority of owner-occupiers we’re dealing with haven't lost interest in buying, but have been relatively content to sit in a kind of holding pattern until they can get a clear run. We predict any fears sellers may have that demand will slacken off after 1st April will prove completely unfounded, certainly in London.”