This month’s Market Report comes at a somewhat confusing time for the financial aspects of buying and selling a property. It is effectively a crossroads at which recent Government initiatives seem to collide. These include things like Help-to-Buy, SDLT Stamp and inheritance tax changes, and higher taxes for buy-to-let landlords and second homeowners. Indeed, the Institute of Economic Affairs has said that almost all of the Government’s interventions in the housing market have been “a step in the wrong direction”. For example, has the Help-to-Buy scheme pushed prices out of reach for whom it was designed to help?
There has been a huge rush among buy to let investors forming limited companies since the beginning of the year in order to avoid the 3% additional stamp duty that they will need to pay unless they complete by 1st April.
This is overlaid by uncertainty over whether or not Britain will leave Europe and this is having further knock on effects in terms of the divisions that are being created in government and industry in general. And the one thing any market does not like is uncertainty. Fortunately the property market is less prescriptive than other markets as it involves people’s real lives and day-to-day housing needs. It would seem that these uncertainties have done little to quash buyers’ thirst for property, especially during these continued times of low interest rates. These certainly look set to stay as indicated by the announcement that the Halifax has reduced rates on many of its new mortgages by up to 0.30% with fixes for up to five years (and at 95% loan to value), with some mortgage rates starting from as little as 1.64%.
These low interest rates have played their part in driving up prices and UK house prices and rents are among the highest in the world, both in absolute terms and relative to average incomes. Since 1970, house prices have gone up four and a half times after inflation, although there are huge regional differences.
According to the Nationwide, house prices rose by just 0.3% last month at £196,930, but slid 1.4% according to the Halifax at £209,495. The Land Registry says the market rose by 2.5% last month taking the annual increase to 7.1% at £191,812.
According to Nationwide, the average UK house price is now £196,930, up from £196,829 in January. Halifax puts the average price at £209,495 in February, but says this is down from January. Rightmove’s average asking price of new properties entering the market rose by 2.9% last month alone but fortunately this has been tempered by a welcome 5% increase in stock over the same time last year.
So the market remains relatively stable with no imminent issues. So whether you’re a buyer or a seller, now might not be a bad time to take the lead from your personal circumstances and ambitions rather than watching “the market”. Please feel free to contact us if you wish to discuss any moving plans, no matter how tentative they may be and we’ll give you straight-talking, good advice, in context and without any obligation.
Neil Newstead FARLA MNAEA
CEO – Oakfield Estate Agents