The first three months of 2016 saw a considerable increase in activity compared to the previous quarter. Valuations and instructions to market homes for sale were both comfortably up by more than half as sellers showed a determination to achieve a sale, rather than just marketing their properties at over-ambitious asking prices and hoping for the best. This was reflected in the number of homes available for sale at the end of the quarter, which was 8% higher than at the end of the previous quarter and 24% up on the corresponding period last year.
Demand also rose during the quarter, with the number of buyers registering up by 44% and viewings increasing by almost a third. Much of this increased demand resulted from the Chancellor's announcement in the Autumn Statement that a 3% stamp duty surcharge would apply to second homes and buy-to-let properties completed from 1st April 2016 (unless purchasers had exchanged contracts on or before 25th November, the date of the announcement). There was an increase in activity from buy-to-let investors (BTL) in particular and the Council of Mortgage Lenders reported a 31% increase in BTL mortgage loans for house purchase compared to the previous quarter and a jump of 77% compared to Q1 2015.
With sellers more willing to negotiate on price, exchanges rose by 8% over the quarter and were 31% up on the corresponding period of 2015, while fall-throughs dropped by 5%. March was an especially strong month, with sales more than double the combined total for the first two months of the quarter.
Overseas purchasers received an additional incentive to buy in the form of further declines in sterling, which fell to its lowest level against the dollar in seven years in February; against the euro, the pound fell by 11.5% between mid-November and the end of March.