Housing Market Overview 2016
Hunters Director Martin Robinson gives his update on the UK property market and what has affected house prices so far in 2016:
Demand during the first quarter of 2016 was to some extent driven by the investor stampede to acquire property and complete on the transaction before the stamp duty reform came into effect on the 1st of April. This affected both the sales and lettings market with high levels of activity across our network.
We then saw investors pausing for breath before realising that despite paying an additional 3% of stamp duty, bricks and mortar is still a very sound long term investment and we anticipate a continued appetite from investors and Buy-to-Let landlords. The lettings market remains strong.
Housing continues to be in short supply however. “So why is supply short?” Apart from the on-going shortage of new builds, a significant log jam in the fluidity of properties transactions is the group of owners we are calling, ‘mortgage prisoners’ - people locked into their current mortgage agreements. Realistically they would potentially be worse off by moving as they are tied into a very favourable repayment rate, as long as they stick with their current property and do not put themselves in a position where they would be forced to change products.
The future, however, looks bright and we believe that the boom and bust days will be a thing of the past. As long as interest rates remain low and annual house price growth continues in single digits, we will have a sustainable balance in the market place for buyers, sellers and landlords. The last month has in fact seen some very positive signs; in April at our Group owned offices, we saw instruction levels (properties coming onto the market) at an all year high and this is always the springboard for greater market activity ahead. The lettings market has experienced similar trends with increased levels of activity at the end of April and beginning of May.