More evidence of landlords rushing to beat the forthcoming buy-to-let stamp duty rise has been given with the results of the latest figures released by the British Bankers’ Association.
According to the data, gross mortgage borrowing from High Street banks increased to its greatest level since 2008.
Pre Stamp Duty surge
The number of mortgages approved for house purchases was 27% greater that at the same stage in 2015, with the British Bankers Association putting this down to a rush to beat the increased charges.
Recently, the Council of Mortgage Lenders (CML) reported that it had seen an eight-year high in mortgage borrowing.
Mortgage lending may be rising, but the number of completed property sales has yet to show a significant rise.
Figures from HMRC show that the number of property sales in Britain actually slipped on a seasonally-adjusted basis, in comparison with December.
New year buy-to-Let surge recorded by BBA
Buy-to-let Warning
Stamp Duty increases are expected to bring in an extra £1bn for the Treasury by 2021. However, landlords have expressed concern that it will see off investment in rental accommodation.
Samuel Tombs, chief UK economist for Pantheon Macroeconomics, is convinced that demand will carry on exceeding supply in the market, with house prices rising as a result.
‘Looking ahead, we expect approvals to remain on an upward trend,’ he noted. ‘Consumer confidence is high, real income gains remain strong and mortgage rates are set to fall again in response to the decline in wholesale funding costs.’[1]
Mr Tombs went on to say, ‘new buyer enquiries at estate agents have been rising quickly and point to mortgage approvals rising by a further 5% over the next three months. With the active supply of homes on the market close to record lows, house prices look set for very strong gains.’[1]
[1] http://www.bbc.co.uk/news/business-35648994
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