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House prices in England surge in buy-to-let rush as Wales and Scotland stagnate


03-23-2016

first time buyers 
 

House prices in the UK jumped 7.9pc in the year to January as landlords rushed to buy before the April 1 stamp duty deadline makes the cost of buy-to-let properties more expensive.

Figures from the Office for National Statistics revealed house prices in England surged ahead 8.6pc, fuelled by increases in London, the South East and the East. But values in Wales fell by 0.3pc, and remained at a standstill in Scotland.

Rishi Passi, chief executive of development finance firm Oblix Capital, said: “Behind the scenes, an imbalance between supply and demand has been squeezing the bottom end of the market, which together with a rush to beat the April stamp duty rise, has driven up prices and stretched affordability for those taking their first step on the housing ladder.”

Regional house price variation
Credit: ONS

Richard Snook, senior economist at PwC, said that the figures “show strong momentum,” adding that “performance has been mixed across the UK with the market cooling in Wales, Scotland and Northern Ireland, where prices are roughly unchanged from a year ago, while growth in the South continues to power ahead".

He said: “The recent changes to stamp duty, whereby supplementary rates will be charged on purchases of additional homes, may be providing a small boost to the market, as people rush to complete transactions before the changes come into force in April this year.” 

Prices paid by first-time buyers were 7.7pc higher than they were in January 2015.  

Mr Passi added: “The new Lifetime ISA and Help to Save initiatives will go some way to give entrants to the market a much needed leg up, and with local authorities across England planning 270,000 houses a year over the next 15 years, the Chancellor’s commitments to house building may begin to level the playing field.”

Campbell Robb, Shelter’s chief executive said: “Another rise in house prices is further evidence that the housing market in this country is completely broken, and means just one thing to the millions of ordinary families who can’t afford a home of their own – their dreams of home-ownership have just spiralled even further out of reach.”

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