Industry expects housing market to experience slowdown after stamp duty changes
Published: 10 March, 2016
House price inflation peaked last December ahead of an anticipated rush to beat buy-to-let tax rises. Rate of house price inflation is now predicted to slow as April’s stamp duty changes are introduced and more modest growth in property sales is projected following the buy-to-let rush, the latest survey from the Royal Institution of Chartered Surveyors (RICS) has revealed.
While 74% of respondents expected there to be a rush on buy-to-let purchases ahead of stamp duty increases coming into effect in April, the RICS UK Residential Market Survey, February 2016, showed that only 17% expected to see an increase in sales over the coming three months.
In addition, while house price inflation expectations peaked following the Chancellor’s Autumn Statement, with prices driven by speculation regarding an increase in investor demand, this trend is set to soften from March as investor interest dampens. Only 21% of respondents expect prices to increase over the coming months.
RICS chief economist, Simon Rubinsohn, said: “While there remain significant doubts as to whether the government’s plans to encourage a more robust development and construction pipeline will be sufficient to address the housing crisis, long-term price indications for the housing market remain strong, with respondents still expecting them to rise by a further 25% over the next five years.”
The survey showed that house prices continued to creep up throughout February. In the UK, East Anglia continues to show the sharpest price increases, with 91% of respondents reporting that prices had risen over the past month. London and the North East by way of contrast saw very modest gains.
Image courtesy of Shutterstock/ Rob Hyrons