Next week brings the final days before the stamp duty hike that will occur on 1 April. From then on, the tax bill on a home purchase will increase for those buying a second home, such as a buy to let property, by 3%. Therefore, in the months leading into April, mortgage lending has seen a strong demand as landlords have sought to secure their loans before the deadline.

According to reports by the British Bankers’ Association (BBA), in February there was a 20% increase in lending over January with a volume of 79,428 home mortgages. The Council of Mortgage Lenders (CML) reported that gross mortgage lending had grown to £17.6bn in February, which is a 30% increase over February of last year and the highest level for the same month since 2008.

According to an investment expert, the number of new rental properties made available in the UK increased by 6% between 14 March and 20 March compared to the prior week. The fact that landlords have been buying up properties has pushed the housing market to an even higher demand with a lower supply. Such quick buying pressure is pushing house prices upward.

Yet experts believe there is the possibility that the higher tax rate will push landlords to sell off properties. This will result in a flood of properties coming onto the housing market and could pull house prices lower. However, there are others that believe the demand for rental properties will keep landlords in business, but with a penalty to renters as they see increased fees as buy to let owners seek to maintain their profits.

Mohammed Jamei, a CML economist, said, “While there may be a slight current boost to lending as some transactions seek to complete before the April 1 tax changes in the buy-to-let-sector, this is likely to be followed by a slight fall in activity.

“Affordability pressures continue to weigh on activity, as does the low number of properties coming on the market, though this has improved.”