Residential transactions leapt by 70% in March this year, compared to the same month last year, in what experts are viewing as the first quantification of the rush to beat the government’s new stamp duty surcharge.
The provisional data which originates from HMRC, reveals 165,480 residential transactions took place in March; 41.5% higher than in February this year.
HMRC has said that the significant increase in transactions can be explained by the 3% surcharge on buy to let properties and second homes that was introduced on April 1.
The same, it says, applies to Scotland, where the Land and Buildings Transaction Tax surcharge, which parallels the Stamp Duty Land Tax surcharge was an issue.
Other factors may also have been at play, according to HMRC, such as the upcoming restrictions on buy to let mortgages that will result from Bank of England reforms, expected to be rubber-stamped in the near future.
Aware of the up-coming reforms, buyers could well be pushing to complete on transactions sooner rather than later.
The Revenue’s figures have been adjusted to take into account seasonal fluctuations and other factors.
The non-adjusted residential totals reveal an even more dramatic picture, with last month’s figure being 74.8% higher compared with February, and 77.1 % higher than March 2015.
Lucian Cook, head of residential research at property firm Savills, said:
“This is clearly a one-off event and such volumes are unsustainable against a backdrop of economic uncertainty and the prospect of an increased regulatory environment for buy-to-let borrowing.
“We’d expect a significant fall in transaction levels in the second quarter of the year to offset the March activity and the stamp duty surcharge to act as a longer term drag on housing transactions.”