Buy-to-let investors are pushing house prices up by rushing to market before the 3% stamp duty surcharge comes into force, a Royal Institution of Chartered Surveyors residential market survey said.
With the 3% stamp duty surcharge coming into effect in April three quarters (74%) of chartered surveyors predicted an influx of activity from buy-to-let investors.
Half (49%) of surveyors reported price rises in January, while three quarters (72%) expected them to increase in the next year.
Simon Rubinsohn, RICS chief economist, said: “With buy-to-let investors rushing to get into the market ahead of the stamp duty hike, the near term pressure on prices is if anything intensifying despite a higher level of supply.”
The housing market saw supply pick up for the third time in 18 months in January although stock remained low with 46 properties per branch, 21% lower than a year ago.
Supply has failed to keep pace with demand since 2009.
Brian Murphy, head of lending at Mortgage Advice Bureau, said: “The market should settle into a more regular rhythm once the stamp duty deadline has been and gone.
“However, the RICS survey indicates house prices will have a notable upward momentum over the next 12 months. This is troubling for first-time buyers, although recent government policies have helped to improve the number of affordable housing options.”
He added: “Given that stamp duty is paid upon completion, time is fast running out for those that are not yet well on the way to finalising a sale.
“New builds may seem a good option given there is no onward chain – but many of these are sold well in advance, and any delay in property construction could tip completion beyond the deadline.”