With the introduction of a new 3 per cent stamp duty surcharge, the second quarter of 2016 was always set to be an interesting study for the housing market. But the picture uncovered by TwentyCi is somewhat unexpected.
As soon as the extra stamp duty on additional properties was announced in the Chancellor’s 2015 Autumn Statement, the housing market looked set for a sudden flurry of buy-to-let and holiday home purchases.
This has been largely borne out, with 221,100 homes changing hands between 1 January and the 31 March deadline. Surprisingly though, total sales hit 297,890 in Q2 – up 35 per cent on Q1 and 7 per cent against the same period in 2015 – suggesting that perhaps not all of those jumping on the buy-to-let bandwagon managed to complete in time.
Despite predictions of a short-term price hike in Q1 as buyers pushed through quick sales, the average cost to buy remained relatively stable into Q2, falling by just 1 per cent. That put the average price at £285,994, up 3 per cent year on year.
Interestingly, despite the apparent surge in rental properties, the cost of renting continued to rise in Q2, with rent averaging £822 per month, up 3 per cent both on Q1 and year on year.
Demand for rentals also grew, with the number of properties rented increasing to 140,439, up 1 per cent on Q1 and up 5 per cent year on year. Perhaps not surprising given the cost of buying a home has risen by 3 per cent since last year.
The long-term impact of the stamp duty surcharge is yet to be seen, but we’ll be watching closely over the coming months. This also applies to the more recent implications of Brexit on the UK property market which will likely emerge over the coming months.
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