There was a sharp increase in the number of property transactions between February and March 2016 as property investors rushed to snap up buy-to-let investments before the stamp duty surcharge of 3% on additional homes came into effect on 1 April, fresh data shows.

HMRC reports that the number of residential transactions in March reached 161,990, up from 91,490 completions in February 2016.

Since the start of April, anyone investing in property costing more than £40,000 to let or use as a holiday home have been required to pay stamp duty on the purchase at a rate three percentage points higher than the standard rate, which has almost trebled the purchase tax on a typical £275,000 buy-to-let home from £3,750 to £10,800.

“These official figures show the huge scale of desperation for buy-to-let investors and holiday home buyers to beat the new 3% stamp duty surcharge,” said Doug Crawford (pictured), CEO of My Home Move.

“The 40% monthly increase also shows just how well the industry pulled together to help push property purchases over the line, with whole chains of purchases depending on successfully completing before the end of the month,” he added.

Separate figures from the Council of Mortgage Lenders (CML) reveal that gross lending was up by 43% month-on-month and 59% on the previous March at a total of £25.7bn. It was the highest March figure for nine years.

Mohammad Jamei (below) said: “Against a backdrop of a recovering market, the substantial jump in lending in March was significantly influenced by a late surge of activity to beat the government’s stamp duty change on second properties, which came into effect at the start of April. The distortion caused by this stamp duty change appears to be larger than any previous stamp duty change we’ve seen.”

However, with the rush to buy investment property now over, Jamei expects to see activity levels slow over the next few months.

“We expect there will be about 10,000 fewer mortgaged transactions each month in the second quarter of 2016 than would otherwise have been the case, offsetting the increase in activity seen in March,” he added. 

Andrew Bridges (pictured), managing director of Stirling Ackroyd estate agents, agrees that the flurry witnessed in March could indeed be a short-term feature and predicts that “April showers lie ahead”.

“After a summit in sales has been reached, there’s now a natural dip. But following this short-term correction, there will be a more stable, and sustainable selling rhythm for the rest of 2016,” he said.

David Brown (below), CEO of Marsh & Parsons, also believes that the housing market can probably expect a slight steadying in the second quarter of the year, as “investors take a brief step back to assess the impact of the stamp duty surcharge”. But with buy-to-let returns continuing to outperform all major asset classes, he insists that “March is by no means the last hurrah”.

He added, “The golden combination of low mortgage rates and a sunny economic climate will lift housing activity back to levels we saw in 2015.”