East Anglia appears to have overtaken London in the property hotspot stakes after it was named as the region where house prices are rising the fastest.
House prices are continuing to increase across the UK, driven by an ongoing shortage of properties coming on to the market, according to the Royal Institution of Chartered Surveyors (Rics). However, it said “punitive” changes to the stamp duty regime announced a year ago appeared to have taken their toll on the top end of the London market.
In its November market survey, Rics said East Anglia, plus the south-east and the east Midlands, were leading the way in terms of price growth.
East Anglia saw the “firmest” price increase, with the proportion of Rics members reporting rising prices minus those reporting falls – the net balance – standing at 67%.
It was also the Rics members in East Anglia who were most confident about the outlook for price growth over the coming 12 months. This was despite the fact that 42% of the survey respondents in the region already view house prices as expensive.
Rics member Chris Philpot, of chartered surveyor and estate agent Lacy Scott & Knight in Stowmarket, Suffolk, said a shortage of property coming to the market “is prompting some high prices”, while David Knights, of Ipswich-based estate agent David Brown, said: “Sensibly priced properties are still in demand and selling well.”
By contrast, said Rics, price growth appeared to be moderating in London – it slowed for the fourth consecutive month in November. In the UK as a whole, the number of new properties coming on the market fell for the 10th consecutive month.
Simon Rubinsohn, chief economist at Rics, said: “I can’t recall a set of comments in the residential survey that have so frequently drawn attention to lack of stock on the market. Given this, it is hard not to envisage prices continuing to climb upwards as we move through the early stages of 2016.”
Some Rics members said last year’s stamp duty changes were holding back the prime market in some parts of the UK, particularly London and the south-east. Reforms announced in the autumn statement in December 2014 have led to much bigger stamp duty bills at the top end of the market. That means homebuyers pay 2% stamp duty on a property costing between £125,001 and £250,000, 5% on any portion between £250,001 and £925,000, 10% on the next chunk up to £1.5m, and 12% on any cost above that.
Rics said that in London, the more “punitive” tax rates at the higher end of the scale had led to more subdued sales volumes.