17th May 2016
Following the government’s announcement in November 2015 that they were planning on implementing a slab 3% Stamp Duty increase on any second property, we here at Choices found ourselves in a rush to get properties exchanged and completed by the end of March. Fortunately for our clients we managed to do as such and they avoided a much more expensive stamp duty bill than they could have had 24 hours earlier.
All this being said, I have looked into a number of statistics and stories about the affect that the increased stamp duty has had on the property market in the UK and collated this for your benefit.
The Office of National Statistics (ONS) have released their figures for March 2016 and to put it plainly simple, UK house prices rose at their fastest monthly rate since 2004. The house price index provided by the ONS rose by 2.5% in just one month. This was, of course, fuelled by buy-to-let investors flooding the market, often paying over the asking price to ensure a property was able to be completed before the change in taxes took force.
The average UK house price according to the ONS is now £291,820. If we look at house prices over the last 12 months, it is only the slump in oil prices that has caused the UK to miss out on a double figure increase with the average house price increasing 9%. The oil market has hit the Scottish market very negatively with prices dropping a staggering 6.1% over the last year. London, of course, continued to grow faster than the rest of the country but most regions have seen strong growth and see house prices now above what they were at their 2008 peak.
A study has looked into the number of new rental properties that reached the market in April. As the surge for property completions to take place before 1st April, the buy-to-let investors have flooded the market with new rental properties giving the market a much needed boost.
Although the national average increase in rental listings was up 11.5% London was, for once, not leading the way with an increase of 9.1%. The top three locations for new listings were Worcester which was up 48.9%, Chelmsford up 38% and a rise of 36.4% in Stevenage all of which are staggering.
Other areas that experienced a rise in new listings between 22% and 35% were Southport, Bath, Woking, St Helens, Telford, Newport, Gloucester, Oldham, Oxford and Milton Keynes.
Home owner lending was up by 60% year on year in the UK in March with buy-to-let investors rushing to beat the stamp duty deadline. Council of Mortgage Lenders figures show that landlords borrowed £7.1 billion which is an 87% increase month on month and 163% over the year. Obviously this is distorted by the change in tax but shows the demand for investors buying properties is as strong as ever.
For more information about what is happening in the property market and what we expect to happen in the coming months, why not come along to one of our Property Investment Seminars. The upcoming dates can be found on our Events page. Alternatively, give one of our advisers a call on 01342 840 050 to discuss your property queries or to organise a one to one consultation.