Robust house price growth, Stamp Duty and the threat of the Brexit.

  • Is the housing market due for a slow down in summer 2016?

    Is the housing market due for a slow down in summer 2016?

UK house prices continue to rise at a

The Nationwide Building Society has also commented  house price growth remained "steady". They see demand outstripping the number of homes on the market, so pushing up house prices. The Halifax states that house prices in the three months to the end of February were up 3% compared with the previous three months.The annual rate of change of 9.7% was unchanged. The average home value stood at £209,495 with property prices down 1.4% in February compared with January. Whilst they expect prices to continue to rise over the coming months they note that there are some tentative signs that the supply in the market is starting to improve. Further ahead, they forecast that increasing affordability issues as house price increases continue to exceed wage growth, are likely to curb housing demand and cause price growth to ease.

According to the Nationwide much of the house price growth is likely to be related to the impending increase in stamp duty on second homes, which is due to take effect in April. This is likely to have brought forward a significant number of purchases, which in turn will probably, in their opinion, result in a fall back in mortgage approvals during the spring/summer. Changes to the system, announced by Chancellor George Osborne in the Autumn Statement, mean that buy-to-let landlords and owners of second homes in England and Wales will have to pay a 3% surcharge on each stamp duty band.

Some esteemed economic commentators believe that prices would rise by 6% in 2016. However, a number also warn that the UK's referendum on EU membership on 23 June could pose a potential major downside risk to housing market activity and prices. A vote for Brexit some say could see a marked hit to UK economic activity over the rest of this year and in 2017 amid heightened uncertainties, which would more than likely weigh down heavily on the housing market.

Tony Wing DipSurv MRICS FNAEA
Sales Director
Lincoln Office
Email: tonywing@robert-bell.org
Tel: 01522 538888
Twitter: @robertbellandco

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