House prices fall in the wake of the buy to let rush
Market forces can work both ways as we have witnessed in the housing sector over many years, the effect of the stamp duty resulted in an increase in price of homes as buy to let landlords rushed to get hold of property before the tax; demand exceeding supply.
Now as the market has settled prices have begun to fall as more properties remain unsold, in England and Wales a 0.5% fall in March has been seen. As normal the prices do vary region by region with London and the East of England the only two regions with month on month growth.
For the capital property prices increased by 0.2% month on month and by 13.9% year on year, this takes the typical average price of a property there to £534,785, the East of England also saw a similar price rise, but the annual growth there was 10.7% and average value to £220,989.
Prices of property in general over the year have seen increases, but there have been exceptions, the North East is one where annual growth was down by 0.7% to £97,581. Elsewhere across the country prices rose the south east seeing the highest at 10.3%.
It is no real surprise that we have seen a fall in prices and as pointed out market forces will prevail, experts agree that it is easy to see after the mad rush in March as buy to let landlords and second home buyers sought to beat the introduction of a 3% stamp duty surcharge on additional homes that came into force on the 1st of April.
Again it is the result of too few homes being built and in places like London it is becoming a city that with a staggering 13.9% increase annually when the price of a property is now an average of £534,000, homeownership is fast become possible for only the very wealthy.
Lack of available affordable homes is a major factor as we have seen and this will cause property prices to increase, also low interest rates will continue to drive demand. The main area of concern is still for the first time buyer and in spite of government intervention, such as Help to Buy, Starter Homes and the Lifetime ISA, these schemes are still falling short for the many millions trying to get a foot on the housing ladder.