The UK residential property market looks set to see further house price growth as demand continues to exceed supply amid a sustained period of record low interest rates and an increasingly competitive mortgage market. Such factors appear unlikely to change in the short term with an interest rate rise unlikely to occur until the end of 2017.
The introduction of an additional 3% Stamp Duty Land Tax (SDLT) surcharge on buy-to-let and second home purchases from 1 April 2016 has led to an immediate uplift in investor activity, although this is expected to dampen significantly once the tax is in place. This is expected to lead to an over-supply of property in certain areas of the market as landlords look to offload low yielding stock or leave the sector altogether.
In London future growth is expected to be most notable in lower value inner London boroughs and outer London boroughs well connected to the capital’s key business districts. Conversely, Prime Central London looks set to remain flat through 2016 with over pricing and uncertainty over the global economy and stock markets curtailing buyer activity.
Head of UK Residential Valuation
+44 (0)20 3296 4438