Taylor Scott International News
Residential property sales in the UK increased by 1.5% between April and May 2016 but the month’s seasonally adjusted figure is 11.9% lower compared with a year ago. The latest report from HMRC says that the large increase in transactions for March 2016 followed by the substantial reduction in April is likely to be associated with the introduction of higher stamp duty rates on additional properties in April 2016. But it points out that whilst April and May 2016 are lower than the corresponding months in 2015, it should be noted that the total for March to May 2016 is still substantially higher than the corresponding period last year. The additional property rates were announced in the Autumn Statement 2015 for England, Wales and Northern Ireland, and in the Scottish Government's draft 2016/2017 budget for Scotland. The report also says that additional non-tax factors may have played a role as well, for example the Bank of England's plans to curb buy to let mortgages resulting in a rush to purchase. The residential count includes properties paying the main and additional rates. Greg Bryce, managing director at SearchFlow, also believes that uncertainty surrounding the referendum on the future of the UK in the European Union has also been affecting the market and looking ahead activity levels in June look set to be dampened as buyers and investors are holding off any decision to purchase until after the vote. However, once the dust settles post referendum, it is expected that activity levels in the housing market will remain buoyant with a strong economy, employment level high, interest rates and mortgage rates low and the economic and housing policies unlikely to change very much. The market is expected to bounce back if the vote is for the UK to remain in the EU, according to Doug Crawford, chief executive officer of My Home Move. ‘Ultimately, high levels of demand for both rental and owner-occupied accommodation will drive transaction figures upwards,’ he said. The firms most recent forecast predicts that sales will rise by 7% this year and by 20% by 2020. The figures show there has been a continued ripple effect from the stamp duty change, according to Rob Weaver, director of investments at property crowdfunding platform Property Partner. ‘The desperation to complete before the April 1st deadline pulled forward thousands of housing transactions that would normally have happened in April or May. March recorded the highest number of transactions in a decade,’ he said. He also pointed out that overall, 2016 is beating 2015 with transactions for the first five months of the year up 13% on the same period last year. ‘If we vote Remain on Thursday, we can expect a rising trend in activity as buyers and sellers re-engage after the referendum,’ he explained. ‘Transactions should slowly rebuild as the summer months are historically strong. But the dire shortage of supply is the main reason why we see house prices on… Taylor Scott International
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