Interest in purchasing buy-to-let properties has collapsed as new tax changes start to bite.
The number of people planning to buy a property to rent out has dropped by more than a quarter due ahead of the new 3% stamp duty surcharge on second homes, which came into force on 1 April.
Interest in new purchases from buy-to-let investors dropped 27% in March compared to the same month last year, reversing the 24% year-on-year rise between December and February.
However, the figures from property portal Rightmove also show demand from home-hunters at an all-time high with a record number of first quarter enquiries.
The pause from investors could give some first-time buyers more of an opportunity to make a move, as Chancellor George Osborne intended.
Sam Mitchell, Rightmove’s head of lettings, said: “This waning of interest definitely seems to predict a slowdown in the buy-to-let market, but what’s not yet clear is if this will only turn out to be a short-term pause.
“It could be that some investors are waiting until the tax changes bed in before they review their business and continue to make purchases.
“If this removes some of the competition for smaller properties then it could spell good news for many first-time buyers as they may find now is the ideal time to make a move.”