Buy to let investors and second home owners were behind three in five property purchases made in prime London during the first quarter of the year according to estate agent Marsh & Parsons - lesading to a big surge in cash purchases.
Accounting for 36 per cent of all the agency’s sales from January to March, buy to let investors were of course trying to beat the April 1 stamp duty surcharge deadline. This represents a significant spike from 26 per cent of purchases during the previous quarter, and a sudden reversal of the recent trend of weakening investor influence.
But even the past quarter’s figure remains lower than the ‘peak investor’ fourth quarter of 2014, when investors accounted for 37 per cent of the agency’s sales.
Those purchasing a second home became the second most prominent type of buyer in prime London in Q1 2016, accounting for 23 per cent of purchases.
The agency says this preponderance of second home owners and buy to let investors has translated into a much higher proportion of cash purchases. Some 40 per cent of purchases were made by cash buyers in Q1, an increase from 34 per cent in Q4 2015 and 36 per cent a year ago.
“This was by no means a typical quarter. Sales activity in the opening three months of this year has been exceptionally skewed by the additional layer of stamp duty ... Now that the ruckus has passed, we’ll see much more orderly transactions over the summer months” claims David Brown, Marsh & Parsons’ new chief executive.