Expedited mortgage applications, offers well above the asking price and sellers squatting in their former properties for free are all part of the pre-April buy-to-let landscape in north London.

Agents have reported a surge in activity surrounding buy-to-let from investors hoping to beat the imminent increase to Stamp Duty payable on second homes, which were announced in the Autumn Statement and come into effect on April 1 this year.

The Royal Institute of Chartered Surveyors (Rics) also reported a buoyant December last year and a stampede of buyers in January 2016.

London in particular has seen demand and sales increase significantly with new buyer requests increasing for the tenth month in a row this January and agreed sales rising at their fastest rate since April 2014.

Unsurprisingly, this surge in activity is pushing prices up along with it.

So, what’s a sensible investor to do? Buy now while there’s still just about time to beat the surcharge? Heed warnings of dwindling profitability for the sector and opt out altogether? Or brave it out a few more months until the furore fades and prices settle? And if it’s a questionable idea, why are people still doing it in droves?

What the changes mean

The new rules mean that from April 1 2016, anyone buying a second home either as an investment, a holiday home, or buying a new home to move to while holding on to another property will be liable for an additional three per cent Stamp Duty.

On a £500,000 property this equates to £15,000 on top of the £15,000 tax you’d already be paying. For a £1,200,000 Stamp Duty would be £63,750 if it was a first home. For a second property this rises to £99,750.

This means there are tax savings to be made if you can get your act together in time to complete before the deadline.

However, unless you’re buying an empty, chain-free property with cash you could well be too late now and the final deadline for any purchasers is certainly approaching.

Can you beat the deadline?

Anita Mehra of Benham & Reeves Lettings in Hampstead advises caution on this front, especially for those considering buying a new build off-plan.

She says: “If you want to avoid tens of thousands of pounds of additional taxes in the form of Stamp Duty, you must have completed on the property purchase unless you exchanged contracts before November 25, 2015.

“This means you must have paid for the built property in full and have received the keys. Exchanging contracts is simply a promise to buy the property once complete so if investors have only gone through this first step, it is not enough to avoid the additional stamp duty. They must complete.”

However, for those who are really determined there are ways to expedite the process.

Islay Robinson of specialist mortgage broker Enness Private Clients says: “Across north London, the whole market is very busy trying to meet the demands of potential purchasers as a result of the SDLT changes coming in at the end of the tax year.

“Lenders have created ‘fast lanes’ for borrowers trying to complete before the deadline, surveyors are feeling the demand which is affecting how quickly reports are completed, and solicitors are reporting a spike in activity. All of this is set to increase as April approaches.

“If you are considering a new purchase and would like to avoid the surcharge, you still have time – but not much.”

Buying frenzy

You won’t be alone if you do try to beat the deadline. Ben Felfelli of CH Peppiatt in Chalk Farm reports one of his busiest ever periods in the past couple of months with a rash of buyers after a pied-à-terre in London or a rental property for their portfolio eager to complete asap.

He says: “It’s mad. I look at it and even I can’t believe the lengths some people are going to.

“At the moment I’ve got 16 properties under offer in Chalk Farm, Camden, Regent’s Park and Primrose Hill for between £500,000 and £1.2million and 80 per cent of those are second property owners who want to see them complete before April.

“Everyone’s really picking up the pace. Some sellers have said if buyers don’t exchange by the following week they will switch because they’ve got people queuing up to buy.

“It’s got people not thinking straight. I’ve got a property in Kentish Town which was on for £600,000 and the buyer has offered £640,000 to rush it through. That’s more than the Stamp Duty they would have had to pay after April, and they’ll still have to stump up £20,000 tax.”

Another agent mentions a couple buying a pied-à-terre in London who were so keen to complete before the changes they are letting the sellers stay in the property for free until their next sale completes.

Should you try and beat the deadline?

With the market this overheated, could you even make financial savings by waiting until the dust settles and accepting the extra one off payment?

Simon Gerrard of Martyn Gerrard estate agents points out that in an area like north west London, investors are unlikely to lose out by investing in buy-to-let, even if it costs them more initially.

He says: “North and north west London remain sought after areas to live in. With the shortage in supply and no letup in demand, it is quite probable that rents will rise at a higher rate than in recent years and this increase in yield together with a steady rise in capital growth are set to counter any negative impact of the changes.”

Indeed many commenters note that behind the hot air surrounding the April 1 deadline, there are plenty of other changes designed to level out the buy-to-let market, which should cause potential buyers more pause for thought before diving in than the increased Stamp Duty.

A reduction in mortgage interest tax relief, changes to the wear and tear allowance and the possibility that the additional Stamp Duty percentage may increase in future all mean that buy-to-let may not be the answer for everyone, especially given the likely costs that will accumulate over the period of a longer term investment.

Play the long game

Buying agent Robert Bailey says: “This whole thing with Stamp Duty is all a bit of nonsense really.

“If you’re pushing forward because of the three per cent, I think you’ve got to look at what you’re buying and if the three per cent could be made up by playing a longer game.

“If you’re considering a new build in a large development, especially one where properties are still being built, then I would say hold off. You’re likely to get a much bigger discount once developers are struggling to sell their properties, probably equating to much more than three per cent.

“However, if you’re buying in a nice converted house in Belsize Park for example, you know that there’s unlikely to be masses of units and you’re not competing with many similar properties so there’ll be demand for it even in a softer market.”

Pulling fewer punches is buying agent and housing expert Henry Pryor.

“Those rushing to beat the introduction of the second home tax are April fools!” he says. “There is no need for buyers to hurry but there is for sellers, which is why you are seeing agents quoted across the media talking up the hype. The Government aim is to make homes more affordable, which means ultimately cheaper.

“Any second home owner or buy-to-let investor can claim Stamp Duty against future capital gains tax or indeed against a future loss (just as they can their buying agent fees!).

“As we saw with the introduction of higher Stamp Duty last year for homes over £1million, the market absorbed this and buyers passed the cost on to sellers in the main. This will happen with the additional Stamp Duty coming in in April.

“Why rush to buy something today that will be cheaper in April (or soon after)? Sellers (and agents) will get less so of course they are rushing.

“I bid on a house a week and buy one every month. Am I rushing around like a lunatic bidding up prices? Am I hell!”