As expected, buy-to-let landlords were spurred into a spending spree last month, desperate to beat the financially unappealing 3% stamp duty surcharge that came into effect on 1 April. According to recently published figures, half of all homes sold in the UK in the final 15 days of March were purchased by landlords.
By contrast, fewer than one-in-five (18%) of the homes sold during the same period last year were bought by a landlord.
It has been estimated that £28 billion worth of home sales were completed in March – a 76% increase on the previous year. Overall, landlords accounted for 23% of homes sold in March, compared to 13% last year.
Due to the unusual circumstances that have resulted in this surge of landlord activity, the first quarter of 2016 has seen a 22% increase in the number of homes brought into the private rented sector compared to Q1 2015. This increase in the number of homes entering the rental market has not been matched by the increase in the number of prospective tenants looking for a home, which ought to temporarily ease the pressure on rents.
However, with tenant demand steadily growing, combined with the likelihood of buy-to-let investment shrinking, the suppression of rental growth probably will not last long.