House prices up sharply in first quarter, says survey
04-23-2016
Stamp duty change sees UK property market experience biggest 'spring bounce' for 12 years
House prices in the UK's big cities rose sharply in the first three months of this year, reports a new survey.
Property market analyst Hometrack says the average price for homes in the 20 biggest cities was 4.2 per cent higher than in the previous three months - the biggest quarter-to-quarter increase for 12 years.
London and Liverpool experienced the fastest rise, with house prices in both cities increasing by 4.1 per cent, driven by the buy-to-let market, says the company.
Property usually enjoys a "spring bounce" as homeowners shake off the winter blues and think of moving. This year, the effect has been exaggerated by the introduction of higher stamp duty for second homes.
Landlords rushed to buy properties to rent out before the 1 April deadline on which the new three per cent duty was imposed.
Yesterday, figures from HM Revenue and Customs showed 161,900 properties were sold in the UK in March, an increase of 62,210 on February and the highest monthly number since June 2006.
On Monday, property website Rightmove also reported a spike in property prices, which it agreed was driven by the buy-to-let market.
Asking prices rose 1.3 per cent for houses in England and Wales coming onto the market in March compared to the four weeks before that, it said, with the average now standing at £307,033.
However, even though the increase was a knock-on effect of buy-to-let landlords spending in the bottom end of the market, prices in that sector had not, in fact, improved, said the site. Instead, the bulk of the increase was in the middle to top end of the market: excluding London, the average asking price for the smaller properties typically bought by landlords fell by 1.4 per cent to £182,926.
It was good news for landlords and those already climbing the property ladder but not for first-time buyers, who need to buy smaller homes affordably.
Looking forward, Hometrack's Richard Donnell said: "We believe house prices will continue to rise but a moderation in investor demand and greater caution in the run up to the EU referendum will limit further acceleration in prices.
"Most likely the rate of growth will slow more rapidly in high-value, low-yielding cities such as London, where prices will be more responsive to weaker investor demand."