Extra Stamp Duty charges could have an impact on both mortgaged and cash purchases by landlords, Nationwide claims.
The lender said buy-to-let activity is gradually rising but remains subdued compared with historic levels, although there is a lot of cash-based activity.
Robert Gardner, chief economist for Nationwide, said: “The past 12 months have seen a gradual increase in the number of buy to let purchases involving a mortgage, with rental increases and an easing in buy to let mortgage rates improving the ability to raise finance. Nonetheless, activity remains quite subdued compared to historic levels.
“However, it is important to note that some cash purchases are also undertaken by landlords and that activity in this space appears to have remained more buoyant. However, higher transaction costs, as a result of recent and upcoming Stamp Duty changes and uncertainty relating to the regulatory environment, also appear to be having a cooling effect on this segment of the market.
“Looking ahead, the changes to Stamp Duty at the start of April are likely to generate volatility in transactions in the near term, as buyers bring forward their purchases to avoid the additional tax. This will likely lead to a jump in transactions in March, and a corresponding period of weakness in the following months, as occurred in the wake of previous stamp duty changes.”
It comes as Nationwide’s House Price Index for February reported aa 3.9% annual rise in house prices and a 0.4% monthly rise to £270,493 on average.
This article is taken from Landlord Today