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House Prices Increasing at Fastest Rate for 12 Years
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Over the first quarter of the year, house prices increased at the fastest quarterly rate for 12 years, according to the latest data from Hometrack.
The valuation firm believes that buy-to-let landlords have driven prices up as they seek cheap properties in high yielding cities.
House Prices Increasing at Fastest Rate for 12 Years
The UK Cities Index for March reveals that average house prices rose by 4.2% in Q1 2016 – the fastest quarterly growth rate in 12 years.
The greatest quarterly increase of any city in the UK was in Liverpool, at 4.1%, taking the average house price to £113,100. Hometrack has found that many landlords have looked to the city for high yields in order to accommodate forthcoming tax changes.
A quarterly boost of 3.5% was also recorded in Cardiff, where the average property now costs £191,300.
The Insight Director at Hometrack, Richard Donnell, explains: “The acceleration in growth in the last quarter has, in part, been down to stronger demand from investors, especially those searching for higher yielding property and seeking to beat the Stamp Duty deadline.”
As of 1st April, buy-to-let landlords and second homebuyers are now charged an extra 3% in Stamp Duty. Ahead of the deadline, there was considerable evidence that landlords were fuelling a rush in the housing market.
The greatest annual increase in average house prices was in Cambridge, where values rose by 15.6% to £403,500. London was close behind, at 14.2%, taking the average property price to £468,100. However, recent research suggests that the London property market is finally running out of steam.
House prices in Bristol have also recorded double-digit growth for the year, at 13.5%, to £248,800.
Donnell adds: “In the recent past, periods of accelerating house price growth have coincided with changes in market sentiment and demand, notably following the introduction of Help to Buy in 2013 and after the 2015 general election.
“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.”1
Indeed, the Royal Institution of Chartered Surveyors believes that the Stamp Duty changes and the forthcoming EU referendum will cause a dip in house prices and sales.
1 http://www.propertyindustryeye.com/house-prices-rising-at-their-fastest-rate-for-12-years/
