The property market is, as expected, hotting up in line with expectations for the Spring. The flurry of activity in the Buy to Let market prior to the April Stamp Duty increase deadline has now died down although it did appear to have ignited a chain reaction in asking prices, with Rightmove recording a record high in the average asking price of £303,700 – up 1.3% on the month (7.6% on the year). The Office for National statistics confirms a similar increase in annual sale prices, although they cite £284,000 as being the average house price (NB Rightmove figures relate to new entrants to the market prior to any reduction and can be skewed by a number of other factors).
Whilst intense deadline-driven investment-buyer demand may have made life difficult for first time buyers, hopefully the way forward will now be clear for them to compete favourably with their BTL competitors. From this month onwards, most investors and second-home owners will have to pay a 3% surcharge whereas regular homebuyers will not. That means that a first time buyer will effectively be able to pay £4,500 more to a seller of a £150,000 property than an investor. Whether this would simply be passed on to tenants by landlords in increased rent or whether it will dampen purchase prices is yet to be seen.
Last month’s increased activity has certainly prompted the onward purchase of successful sellers with a number of chains now having been established. Has the market finally been kick-started out of the doldrums? Indeed, according to the RICS, stock levels appear to have fallen by about 20% on this time last year. Locally, we have seen a slight increase in the number of properties coming to the market, although some are taking longer to sell than others, mainly it would appear as a result of an incorrect pricing strategy. The number of valuations being carried out is increasing as homeowners begin weighing up their options for 2016. Demand is still outstripping supply and this will inevitably prompt further upward pressure on prices, although this might be tempered by uncertainty over the Brexit issue, Sterling’s recent weakness, and, in London, the mayoral election. Never overlook the influence of the London property market on the market nationally!
To sign up for our monthly market report, please e-mail us at firstname.lastname@example.org