Yet again, more evidence has been found that the Government’s stamp duty changes led house prices to rise in March and experts are warning that a chronic undersupply will continue that trend.
British house prices increased by 9% in the year to March 2016, an increase from 7.6% in the year to February 2016, figures by the Office for National Statistics revealed.
Annual house price inflation was 10.1% in England, which was significantly driven by London where prices increased by 13% in the year. Northern Ireland saw a rise of 6.4% and in Wales prices went up 2.1%. Scotland on the other hand is suffering a 6.1% deflation.
Taking London and the South East out of the equation, UK house prices went up by 5.9% over the 12 months, seasonally, the average house prices increased by 2.5% between February and March.
The biggest jump when purchasing a property still comes for first-time buyers. Those getting a foot on the ladder for the first time had to pay 9.7% more in March 2016 than in March one year earlier.
For existing owners the increase averaged at 8.7% over the same period.
On average, buying a house in the UK would set you back £292,000 during March, for London, however, those prices are now more than double.
Haart estate agents chief executive Paul Smith said: “Today’s data shows UK house prices in March soared as a result of the sky-high level of competition for properties which peaked in advance of the 1 April stamp duty surcharge deadline.”
“Our data shows there were 11 buyers chasing every property to come onto the market in March whilst transactions surged 19 per cent on the month.”
“Although we expect to see a level of uncertainty in the housing market over the next month or so, prior to the EU referendum, this will simply be a blip on the horizon as the power of the UK property market will outweigh any short term insecurity. London, in particular, will remain a global safe haven for investment whatever the outcome.”
Mark Posniak, managing director at Dragonfly Property Finance, added: “Lending figures for March may resemble a cricket score but the month was clearly skewed by the stamp duty deadline for buy-to-let and second homes.”
“We are entering a period of uncertainty for both the property market and the broader economy from which it may take some time to emerge. If there’s one constant in the market at present, it’s the continued lack of supply. This deep structural imbalance should prevent prices from falling materially whether we’re in or out of Europe.”