Last month, the number of people buying a house in the UK fell. This dip is largely down to the increase in stamp duty rates on second properties that have forced property investors to reassess their current investment strategies.
This news follows a record month in March, when a rush to beat the 3% stamp duty hike led to 165,480 house sales, up from 116,930 the previous month and representing the highest monthly sales total since records began.
A breakdown of March activity by the Council of Mortgage Lenders reveals that the property market was dominated by buy-to-let. There were just 28,100 first-time buyers over the course of the month, compared to 29,000 who used buy-to-let mortgages and 63,190 cash purchases. Landlords typically account for the vast majority of cash buyers.
The surge in house sales in March led to a 2.2% increase in house prices. However, the slow down in April has reversed this trend, with the average UK house price falling by 0.8%.
London Has Fallen?
Research by property company Knight Frank revealed that house prices in the capital increased by just 0.8% in the year to March, representing the lowest annual price rise since October 2009. However, figures for the 6 months to March showed a fall in house prices of 0.6%, suggesting London’s property bubble might have finally burst.
Following a prolonged period of exceptional growth in the city, these results have seen London slip to 23rd place in a league table that measures the price performance of ‘prime’ property in major cities around the world.
Demand Increases in East Anglia!
Despite the falling number of new enquiries in London and 9 other regions across the UK, there were 3 regions (East Anglia, the North, and Scotland) where the number of new enquiries increased in April.
Investors are now seeking new boom areas, such as the East of England, where prices are currently low but continuing to rise at pace. Average house prices in the East are up by more than 10% in the last year, with Ipswich entering emoov’s UK property hotspot index as the 4th most sought-after place to live.
Clearly, for many property investors, buy-to-let still makes a lot of sense. This opinion is backed by members of the Royal Institution of Chartered Surveyors (RICS), who expect a temporary lull or levelling out of prices nationally over the next 3 months, followed by rises of 3% to 5.5% a year over the next 5 years. Investors are simply turning their attention from the established buy-to-let heartlands like London, to up-and-coming areas like the East and South East of the country.
If you’re looking to capitalise on rising house prices and increasing demand for property in the East, our extensive knowledge of the local market can help buyers, renters and sellers find the right deal. Pop into our Ipswich town centre, Ipswich Waterfront, Felixstowe or Manningtree branches to discuss your plans, or give us a call on 01473 251098 for the expert advice you need.