There has been a lot of talk about buy to let buyers flooding the market to beat Aprils extra stamp duty deadline, but the latest figures from Connells Survey & Valuation show that first time buyer activity in March jumped 15% compared to March 2015 and 41% compared to February 2016.

In March, the total number of valuations carried out rose 8% year on year and grew by 21% month on month and this was primarily due to the first time buyer sector posting strong monthly and annual growth figures.

Indeed the figures show that there was a dip in buy to let activity in March. Corporate services director John Bagshaw believes first time buyers figures have been aided by an increased uptake of Government plans designed to assist the bottom of the market.

‘The Help to Buy scheme has become more widely recognized and used by those who need a little help getting the capital together to fund a mortgage for a first home. Equally, more first time buyers are taking advantage of special first time buyer discounts on certain properties, which has helped those on lower incomes step onto the ladder,’ he explained.

Remortgagors and home movers have also seen a significant boost in valuation activity in March. Total remortgaging volumes were up 25% month on month and up 33% year on year.

‘Those seeking to move up the property ladder are making solid strides this month. With home values high and continuing to increase across all parts of the country, albeit at an uneven pace, many property owners may view it as a good time to either upscale to something bigger and better or downsize and enjoy the surplus capital,’ said Bagshaw.

‘The remortgaging sector has also enjoyed an energetic March. The rates of growth have come down somewhat from what we were seeing in previous months, as those looking to remortgage to fund a second home take a step back to re-assess and absorb the stamp duty changes,’ he pointed out.

‘But with the average mortgage rate still very low and no Bank of England rate rise on the horizon many are taking advantage of the bargain rates in order to release capital on their home or switch to a better mortgage deal,’ he added.

The stamp duty changes, which became effective on 01 April impacted the buy to let market in March. Valuation activity in this sector dropped by 27% between February and March 2016, as well as dipping by 36% compared to the same month a year ago.

‘The buy to let market has endured a turbulent month but we expect this to be a short term tumble, with investors adopting the standard kneejerk reaction to legislative changes by proceeding cautiously. This is particularly true for a tax increase like the stamp duty shake-up,’ Bagshaw explained.

‘Many aspiring buy to let landlords may have realised that if they initiated a buy to let mortgage application in March, they would be unable to get it processed in time to beat the April deadline. Instead, they may be taking their time in order to factor the changes into their financial planning,’ he said.

‘More importantly, the fundamentals of buy to let remain unaffected by the new levy. Home values continue to increase while high LTV lending remains accessible, meaning investors can more easily take advantage of the capital returns on offer from the property market,’ Bagshaw pointed out.

‘Equally, demand for rental property remains strong and potential yields remain appealingly high. As the year progresses, these benefits will be the silver lining that outshines the short term cloud in the buy to let sector that the stamp duty hike has created,’ he added.

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