Buy-to-let landlords, estate agents, mortgage lenders and solicitors firms are rushing to complete property deals before stamp duty rise.
From midnight on Friday, a 3% stamp duty surcharge on second homes will take effect for buy-to-let landlords, estate agents, mortgage lenders and solicitors firms, which is designed to put a brake on the runaway buy-to-let market.
The measure was delayed until 1 April, to give those in the middle of existing purchases time to complete before the new tax change.
After an announcement made by George Osborne in November last year, anyone buying a home that is not their main residence will have to pay a 3% stamp duty surcharge.
In Scotland, the equivalent tax – the Land and Buildings Transaction Tax (LBTT) – is also being up-rated.
From midnight on Thursday the duty on a property sold for £200,000 will rise from £1,500 to £7,500.
Martin Baum, the President of the National Association of Estate Agents, said: “It’s a busy crazy day.”
“We’ve all got a bottleneck, and a huge amount of deals before the deadline. I’ve heard of estate agents and conveyancers staying open till 10pm, and then opening again at 5am this morning.”
Paul Smith, Chief Executive of Britain’s biggest estate agent chain, Haart, said: “In London we have seen a 35% increase in exchange activity in the last week as buyers rush to complete in time for the stamp duty deadline. We’ve been especially busy in north and east London, which are very popular areas for buy to let. Outside of London and the home counties the effect of the stamp duty change has been less noticeable.”
Earlier this week, the Bank of England announced plans to subject landlords to a series of new affordability tests, where their personal income and expenditure could be scrutinised by lenders before they decide to give them a mortgage.
Landlords may also have to prove that they could afford a rise in borrowing costs.