It has been just over six weeks since buy-to-let landlords were hit with tax changes designed to turn them away from investing in property.

But even the potential for dents to profits have done little to dampen buyers’ appetites.

Undeterred, bidders piled into the sale room at one of the country’s biggest property auctions this week. It was the biggest turnout auctioneers Allsop, one of Britain’s leading residential property auction houses, had seen since the start of the year.

Between 1,500 and 2,000 buyers attended the central London event and competition for each lot was fierce, particularly for investment properties in London and the South East.

Early on, one ex-council terrace house in Hackney with “development potential” soared above the guide price of £700,000, eventually selling for £1.5million.

Even the auctioneer sounded surprised.

Landlords have taken a battering from the Chancellor recently, with April seeing the introduction of an additional 3pc stamp duty for buy-to-let investors and second home buyers.

Cuts to the tax relief landlords can claim on mortgage interest payments, due to be phased in from next year, will also hit mortgaged property investors hard.

Buyers at the Allsop auction seem unfazed by the changes, insisting property was still the best place for them to invest.

But even the auctioneers admitted there had been a knock-on effect: bids were lower as buyers took into account the extra costs caused by the additional stamp duty.

“It goes without saying that if your costs are going to be £20,000 or £30,000 more then you will bid lower,” said auctioneer and partner Richard Adamson.

“But because the cost is quantifiable buyers can understand and budget for it. It is not putting them off.”

Many buyers were paying cash, helping them avoid the punitive change to mortgage interest relief.

Others were turning away from buy-to-let, preferring instead to buy homes needing minor development and to sell them on quickly, a process known as “flipping”.

Glen Pilgrim, 54, and his wife Lisa, 56 have built up a portfolio of 30 properties around Cambridgeshire and Hertfordshire over the last three decades.

“The additional stamp duty has seriously affected our buying decisions,” he said. “We were very focused on buy-to-let but we are now looking at buying properties to flip.

“I have had to factor that extra amount in. If rental yields are going to be too low, we need to move the property on.”

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