Number of residential transactions leaps 77% in March – HMRC

The number of transactions over £40,000 leapt a huge 77% compared with March last year as a result of the looming increase in stamp duty on second homes.

The number of transactions was also 74.8% higher than February. In total there were 161,990 transactions for residential property in March across the UK.

To compare, the number of transactions between February and March last year increased from 78,540 to 91,490, an increase dwarfed by the surge caused by the change in stamp duty.

Doug Crawford, CEO of My Home Move said: “These official figures show the huge scale of desperation for buy-to-let investors and holiday home buyers to beat the new 3% stamp duty surcharge.  The 40% monthly increase also shows just how well the industry pulled together to help push property purchases over the line, with whole chains of purchases depending on successfully completing before the end of the month.

“March was the busiest month we have ever seen with a record number of transactions, including our busiest ever day for completions on 31st March reaching a total of 1,120 in the single day.

“The new stamp duty surcharge was turbo charging the property market by bringing forward purchases.  We anticipate that property transactions over the coming months will slow as housing activity cools off from these dramatic levels.”

Andy Sommerville, Director of Search Acumen said: “March saw a huge increase in the number of residential property transactions, as large numbers of prospective property investors looked to beat the implementation of the stamp duty changes.  The number of transactions increased by a massive 40% on February and were 60% higher than at the same time last year.

“Faced with an extra 3% stamp duty, it’s little surprise that investors were thinking with their wallets, but the scale of the surge in transactions shows just how big a motivation this was to buyers with multiple properties. Transaction rates in March were much higher than anything seen since before the recession, and it is encouraging that there are signs of health in the market after some leaner years.

“However the rush is now over and we can expect activity levels to taper off somewhat in April. With the Brexit vote looming and ongoing problems in the international economy, the market is facing a degree of uncertainty, but with demand for homes far outweighing the available supply, any dip in prices and activity is unlikely to last for long.”

David Brown, CEO of Marsh & Parsons said: “The property market in March experienced a real rush that represented more than simply a Spring surge. Driven by a desire to avoid the 3% Stamp Duty levy on additional homes, many investors planned ahead by hunting for new properties in January and applying for buy-to-let mortgages at the start of February, before reaping the fruit of their labour in March.

“The property market can probably expect a slight steadying in the second quarter of the year – as investors take a brief step back to assess the impact of the Stamp Duty surcharge – but March is by no means the last hurrah. The golden combination of low mortgage rates and a sunny economic climate will lift housing activity back to levels we saw in 2015.

“Moreover, it’s worth noting that a sizeable proportion of March’s activity was driven  by homemovers and first-time buyers who are unaffected by the new Treasury levy. With investors taking time out of the market over the near future, it will be interesting to see if first-time buyers in particular take advantage of this window by using the Government support available to them to muscle their way onto the ladder  and realise their homeowning aspirations.”

Today's Conveyancer