Is the property market in a recovery phase?
Many of the top selling agents are being advised by their marketing and research teams that the residential property market across the majority of sectors is finally growing - or should we say ‘recovering’.
This is particularly the case in the more sought after areas where there is high demand for quality properties.
This is evidenced by the Land Registry publishing the average house price for June 2015 of £181,619 - a year on year increase of 5.4%.
The property market has been strengthened by the stability of the post-general election era, the Government's commitment to the ‘Help to Buy’ scheme and continuing low interest rates that many feel will continue into 2016.
The insurgence of the ‘buy to let’ sector could not have been predicted with the new government legislation. The changes in pension rules have increased this demand further with people wanting to take more control of their investments and income potential.
The increasing demand from (a) tenants now deciding that they can afford to make the plunge onto the property ladder and (b) home owners downsizing to something more manageable is adding to the steadiness.
Continued low interest rates and the impact of SDLT
As discussed in our recent blog How is the new Stamp Duty regime impacting the property market? on balance the recent changes to stamp duty and land tax have resulted in around £275m less tax being paid than would have been the case under the old stamp duty regime.
However, the cost of moving remains high and speculation remains about when the post-recession interest rate rise will come seeing as The Bank of England cannot sustain these low interest rates indefinitely. This is having a significant impact on the property market and putting many people off the thought of moving and relocating. Many want and wish to move but are choosing to ‘stay put’ for the foreseeable future.
This impacts on the property market as there continues to be a shortage of high quality properties in the south and south-east of the country leading to higher asking prices than you would expect ‘demand outstripping supply’.