RICS latest survey has indicated that the UK housing market is set to slow down over the next three months following a short-term rush on buy-to-let properties.
House price inflation set to slow following buy-to-let surge
- House price inflation peaked last December ahead of an anticipated rush to beat buy-to-let tax rises.
- Rate of house price inflation now predicted to slow as April’s Stamp Duty changes are introduce.
- More modest growth in property sales projected following buy-to-let rush.
The national picture
While 74% of respondents expected there to be a rush on buy-to-let purchases ahead of Stamp Duty increases coming into effect this April, the our UK Residential Market Survey for February 2016 showed that only 17% (net balance) 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.
The survey showed that house prices continued to creep up throughout February. Across 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.
South West enjoys a surge in sales outstripping all other regions
- The South West has seen the highest rise in sales across the UK for the last three months – 49% of respondents experienced a rise in sales rather than a fall and further increases are expected over the year ahead.
- New instructions to sell also increased more sharply in the South West than anywhere else in the UK as 34% of surveyors saw an increase in new listings rather than a decrease.
- New buyer enquiries in the South West rose for the twelfth month in succession with 49% more respondents seeing an increase in demand rather than a fall.The highest in the UK.
Uncertainty weighs on London housing market
- Price expectations turn negative in prime central parts of the capital.
- After sharp periods of inflation, London house prices look set to stabilize.
- Outer London boroughs remain firmly positive.
- Zone one properties showing signs of downturn.