“The growth rate of UK house prices was always going to slow from the stamp duty fuelled acceleration witnessed last month.”
There was a new record peak in the number of transactions in March, up 11 per cent on the previous peak is seen in 2007, so that says it all really. But despite a surge in demand in the run-up to the Chancellor’s buy to let and second home stamp duty penalty being imposed on March 31st, April prices have still risen. That may surprise some.
It remains to be seen if there is now a lull in demand across the market consequential to this 3 per cent levy being applied, however with interest rates at a relentless low and mortgage products now at record-breaking attractiveness to all, including first-time buyers, I don’t believe the market will slow as much as forecast over the coming months.
Yes, the rate of growth may have dropped annually, currently at 4.7 per cent compared to 5.7 per cent this time last year and we may, therefore, see a kink in the road in Q2 overall with regard to the rate of increase.
But looking month to month, prices are still on the up and the average UK house price is still at its highest level over the course of the last year.
“This continual growth since last April wasn’t brought on by the changes to stamp duty and, although we may see a slight dip in activity over the coming month, prices are likely to carry on increasing for the foreseeable future. So my bet is firmly placed that 2016 will see a very positive rise in values overall, notwithstanding the regional differences that indexes such as these always mask.”