Following changes to the Stamp Duty Land Tax rules for buy-to-let transactions which came into force in April, Landmark Quest has seen a drop in the number of valuation requests it receives for such deals.
The property survey and valuation software and services to the sector has reported a 40% decline in the number of Buy-to-Let mortgage valuation instructions in April 2016 when compared to February 2016.
Between March and April alone, the figures dropped by a significant 30.6%.
Peter Stimson, managing director of Landmark Quest, said: “Overall market instructions were down slightly by 6.6% compared to March, however we saw a sharp decrease in the number of buy-to-let instructions – over 30%, in the same period.
“It’s clear that the race was on for transactions to go through before the new rules came into force on 1 April. It will be interesting to see what happens in May but I am anticipating that volumes will remain low.”
As part of its fraud screening services, Landmark also monitors the property market for potential threats, and following changes to the stamp duty rules, it is reporting a rapid increase in the number of investment properties now appearing on ‘sale under value’ and ‘property club’ websites.
In particular there are a lot of new build developments now appearing offering buyer incentives, as Stimson continued: “With any significant changes like we have seen with the stamp duty rules, we do typically see a change in behaviours.
“Currently, we are seeing a sharp rise in the number of new-build developments either offering “stamp duty paid” deals or appearing in property clubs offered at ‘discounted rates’. Particularly worrying is that rather than just one or two properties at the end of development phase in some instances we are now seeing entire developments appearing for sale ‘under value’.
“Lenders and surveyors really need to do their due diligence and be fully aware of such incentives and schemes to manage and control the risks associated with these.”