Taylor Scott International News
The UK housing market received a fillip from increased activity among those looking to beat the April deadline for the new stamp duty charges on additional homes, a new report shows. The latest analysis from real estate firm Knight Frank points out that demand rose in many regions, with the Council for Mortgage Lenders reporting that gross mortgage lending in February hit the highest level since 2008. It says that activity may ease from April, but in the wider UK market the fundamentals of a lack of supply and low mortgage rates are underpinning the market. Also, in the London and South East markets the effect of uncertainty in the run-up to the European Union referendum is likely to be felt more keenly. ‘In the prime central London market, we expect differing levels of growth in the east and the west this year, underlining the very localised nature of the market,’ said Gráinne Gilmore head of UK residential research at Knight Frank. The report explains that property prices in prime central London fell by 0.1% in February, taking the annual change in values to 1% and the market remains highly localised with stronger performance in areas such as Islington, City and Fringe and South Bank. In comparison, price falls were seen in markets including Knightsbridge, South Kensington and Chelsea over the last year. ‘Overall, demand in prime central London was relatively subdued in the first two months of 2016 as a result of the higher levels of stamp duty and ongoing volatility in global financial markets,’ said Gilmore. ‘Further domestic uncertainty, in the shape of a London Mayoral election in May and an EU referendum in June, means this is likely to continue as buyers adopt a wait and see approach,’ she added. In the country market, prices rose by 3.1% in 2015 and the report says that the market is still being driven by prime properties in urban locations, with buyer demand concentrated on areas with effective transport links and good schools and amenities. In Scotland, prime country house prices ended the year up by 0.1%. Prime central London rents fell by 0.1% in February, the fifth consecutive monthly decline. As a result, the annual rental value growth in prime central London fell to -0.2%. ‘Uncertainty over taxation and slowing price growth in the sales market has resulted in relatively high supply levels, especially at above £1,500 per week. As a result, tenants feel little urgency to agree deals, putting pressure on rental values,’ Gilmore pointed out. The report adds that average UK rents rose by 2.6% in Great Britain over the 12 months to January 2016, according to latest figures from the Office of National Statistics. Taylor Scott International
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