Real estate market activities in the United Kingdom have surged as many buyers and sellers tried to beat the stamp duty implementation. Both sales and mortgage lending figures rose more than twice in March compared to a year ago.
According to The Guardian, figures from HMRC showed that U.K. sales of homes £40,000 or more climbed 77 percent last month to 161,990 property transactions compared to the same period in 2015. Meanwhile, Council of Mortgage Lenders data said that gross mortgage lending increased by 43 percent last month compared to February and 59 percent from March last year. Gross mortgage lending amounted to £25.7 billion, the highest March record in nine years.
The increase in market activities can be largely attributed to the implementation of the new stamp duty which started on April 1, wherein second-homebuyers of properties worth £40,000 and above will be charged an additional 3 percentage points on the cost of the purchase. This drove investors to rush and beat the deadline. Aside from that, home prices have also been increasing recently, resulting in higher sales figures, The Guardian noted.
A report from The Week said that U.K. house prices rose sharply in the first quarter of this year, with 20 cities recording a 4.2 percent increase from the previous quarter, according to data from Hometrack. The report said this is the highest quarter-to-quarter increase in 12 years. London and Liverpool saw 4.1 percent increase in house prices while Rightmove data showed England and Wales recording a 1.3 percent increase in asking prices.
Aside from the introduction of the stamp duty in April, the swelling of prices are driven by the buy-to-let markets and the "spring bounce."
As quoted by The Week, Hometrack's Richard Donnell said: "We believe house prices will continue to rise but a moderation in investor demand and greater caution in the run-up to the EU referendum will limit further acceleration in prices."
