UK housing market activity is slowing after the surge to beat the increased stamp duty surcharge deadline.
Data from the Halifax indicates that yearly house price growth in Britain slowed to 9.2% in April, down from the 10.1% recorded in March.
Records
The cooling of the market comes after the rush to beat the rise in stamp duty land tax for buy-to-let and second properties. A record 165,400 homes were sold in Britain during March, ahead of the tax changes coming into play on the 1st April.
This figure was 11% greater than the previous record number of property sales recorded in January 2007, according to HMRC.
Rob Weaver, director of investments at property crowdfunding platform Property Partner, said, ‘the much-heralded stamp duty deadline ultimately led to a stampede by buy-to-let investors and second home owners up to March. Unsurprisingly, April’s dip in house prices is the calm after the storm.’[1]
UK housing market cools after record period
Concerns
A number of experts have predicted further cooling in the market, as uncertainty surrounding the upcoming EU referendum continues to intensify. However, the market is widely expected to pick up following the vote, with demand continuing to far outstrip supply.
Martin Ellis, Halifax’s housing economist, noted, ‘current market conditions remain very tight as the severe imbalance between supply and demand persists.’[1]
‘This situation, combined with low interest rates and rising employment and real earnings, should continue to push house prices up over the coming months, ‘Ellis added.[1]
Despite the market cooling in the last month, 2016 has still seen a positive start for the property market in general.
David Livesey, chief executive of the Connells Group, believes, ‘this generally positive climate looks set to be maintained over the coming quarters, regardless of the result of the upcoming referendum and with demand for housing continuing to outstrip supply, the outlook for the hosing market remains positive.’[1]
[1] https://www.propertyinvestortoday.co.uk/breaking-news/2016/5/the-calm-after-the-storm
[2] http://www.propertywire.com/news/europe/uk-property-market-outlook-2016051011895.html