Increase in UK Housing Demand as Buy-to-let investors Beat Stamp Duty Rise
The UK housing market has seen a rise in demand following the government's recent announcement that stamp duty is set to increase for buy-to-let investors, according to the latest RICS survey.
The survey shows demand for new properties has reached a three-month high, with chartered surveyors citing a rush to beat April's stamp duty rise as the reason.
From April, buy-to-let investors will be required to pay 3% more in stamp duty charges than residential buyers looking to purchase the same home. Since the Chancellor announced these measures in the Autumn Statement last November, 16% more chartered surveyors reported a rise in new buyer enquiries.
The housing market has experienced an unusually buoyant December. Those in the industry have been speculating that this is the result of the Chancellor's announcement last November. Potential buy-to-let investors are looking to pick up properties before the increased stamp duty levy comes into force next April. If that is the case, then we can expect to see the housing market heating up further over the next few months.
The belief that demand was fuelled by announcements included in the Autumn Statement was further supported by qualitative responses to the survey. Chartered Surveyor, Robert Green of Chelsea-based Estate Agent, John D Wood & Co. said: "December was busier than normal as stamp duty changes have brought buyers back to the market, ahead of April." While James McKillop of Knight Frank, London said: "The three per cent Stamp Duty Land Tax (SDLT) proposal in the Autumn Statement has led to more buyers firming up their intention to buy additional residences in my region before 1 April.
A regional focus
The survey also revealed that house prices in London, the South East and East Anglia look set to rise by a further 5% per annum in each of the next five years, compared to a UK average of 4.5%, despite offering the poorest value for money in the UK.
Some 62% of respondents said that homes in the South East were either expensive or very expensive given the relative benefits they offered, with 57% of contributors in the capital taking the same view. By way of contrast, 100% of Northern Irish respondents and 92% from the North of England believe that homes in their areas offer fair value for money.
A net balance of fifty per cent of respondents reported that UK house prices had risen since November, with East Anglia and the South East of England witnessing the strongest growth.
