What could be the cause?
In March 2016, the price of houses has risen by the sharpest amount in 12 months, reports Nationwide, who expect this to be at least partly due to buy-to-let landlords and want-to-be second home owners rushing to beat the new Stamp Duty Land Tax (SDLT) surcharge that comes into effect from April 2016.
Almost 6% increase
Figures show that British house prices have increased at the fastest pace since over a year ago, with the average price being 5.7% higher than that in March 2015.
The last year-on-year rise higher than this was in February 2015.
Buy-to-let landlords are determined
Chief Economist at Nationwide, Robert Gardner, has linked the spike to buy-to-let landlords and second home owners fighting to exchange contracts before the April SDLT deadline, where they will see significant increases on their purchase price due to the 3% surcharge.
Could these property investors be paying a slightly inflated asking price to get the deal done quickly? This could explain some of the recent inflation in sale prices.
Favourable conditions regardless
However, reduced unemployment, wage growth and low interest rates, along with the shortage of homes for sale, is likely to keep the house prices going upwards for the time being, Gardener suggests.
“The pace of house price growth may moderate again once the stamp duty changes take effect.” Nationwide
George Osborne’s measures to penalise second home owners and property investors is in an attempt to free up property for first-time buyers to stand a chance of homeownership, and to protect the property market from a bubble caused by investors.
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