Number Of Sales Soared Ahead Of Stamp Duty Hike
We felt the volume, and lived the increased pressure for the whole of March, and now we have the confirmation that it was not simply a mirage nor was it a false sense of being overly busy! As according to data from LSL Property Services this morning, the Number of sales soared ahead of Stamp Duty hike and the property market sprang into life during March with the highest number of home sales since 2007.
Its latest House Price Index for March recorded 80,000 property transactions and found house prices had risen 6.9% year-on-year as buyers rushed to beat the Stamp Duty deadline in the buy-to-let and second homes sectors. When you take London prices out of the equation the price increase is 5.1%. The sales figures are 18,650 higher than in February, an increase of 30%, and 7% higher than the typical ‘spring’ increase of 23% for the time of year, according to the report. The average house price in England and Wales reached £291,650, according to the index. This is up 0.6% on February. The data shows 73% of local authority areas in England and Wales experienced a monthly upswing in home values.
So what will happen to the property market in 2016?
The property market will have rather more on its plate in 2016 than the perennial issue of whether house prices will go up or down. The recent decision of the US central bank, the Federal Reserve, to raise interest rates for the first time since the summer of 2006, has opened the door for the Bank of England finally to follow. So, after a few years in which the mortgage tap has been turned back on and sales have revived, is the property market is in line to receive some jolts. So will there be hard times for landlords?
Not only has stamp duty rates risen, but an erosion of some of the tax privileges are now in the pipeline for 2017, after an announcement in the Chancellor's summer Budget. The economic problem, as the government sees it, is that the rise of private ‘landlordism’ has crowded out home owners, especially the first-time buyers.
Finally, and importantly, it is almost seven years since the Bank of England slashed interest rates to a record low of just 0.5%. despite regularly commentary on rising rates for its part, the Bank of England continues to sit on the fence, effectively saying "wait and see". Most independent economists think the first UK rate rises since July 2007 will at last happen this coming year, and by two increments of 0.25% each.
According to Savills latest five-year outlook suggests that house prices will be more than 10% higher by 2020 than they are currently. And, while south east England has the highest expected increase of 21.6%, east England isn’t far behind at 21%. But that’s not all, with expected rises of 14.2% in Yorkshire and the Humber and a 12% gain in the average property value in North East England, an investment in one of these regions could really make sense. Saville’s also believe that for investors considering adding some student buy-to-let accommodation to their portfolio, northern university towns worth serious consideration include Durham, Edinburgh, Manchester, Warwick and Nottingham. Those five should fare well as property prices are low but academic standards are high, research shows. In addition, according to RICS registered chartered surveyors e. surv’s director Richard Sexton, northern regions are a good option. Particularly because prices there have remained “cooler”. Specifically, he expects North East England and Yorkshire & the Humber to be among property hot spots, particularly for first-time buyers. And as you know, where first-time buyers search, investors often follow as it tends to mean house prices are on the lower side.
A number of recent surveys concur with the view that ‘up north’ could be the place to make your next lucrative property investment in 2016.