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House prices leap to new highs amid rush to beat landlord tax

Economy:
House prices leap to new highs amid rush to beat landlord tax

HOUSE prices rocketed by the fastest rate in more than a year last month, as landlords and second home buyers scrambled to complete deals before today's new tax.

Values ​​jumped by 5.7 per cent in the year to March with average prices breaking the & pound; 200000 mark for the first time, according to lender Nationwide.
The typical cost of a home is now & pound; 200251 after a huge 4.8 per cent average rise of & pound; 3321 in February alone.
Experts believe the faster price rises have been trigged by buy-to-let and second home investors looking to avoid a new three per cent tax that took effect today.
Robert Gardner, Nationwide's chief economist, said: "There has been a pickup in housing market activity in recent months, with the number of housing transactions and mortgage approvals rising strongly.
" This is likely to have been driven, at least in part, by upcoming changes to stamp duty on second homes, where buyers have brought forward purchases in order to avoid the additional tax liabilities.
"This temporary boost to demand against a backdrop of continued constrained supply is likely to have exerted upward pressure on prices and helped to lift the pace of annual price growth out of the fairly narrow range of three-five per cent that has been prevailing since the summer. "

In the following months price growth is expected to dive as investors are deterred and home buyers struggle with affordability.
Mr Gardner added: "The pace of house price growth may moderate again once the stamp duty changes take effect in April."
The data also revealed a huge disparity in regional prices, with London and the South East leading the charge.
Values ​​in the capital are now a massive 52 per cent above pre-crisis levels, compared to nine per cent for Britain overall.
At the same time, the North of England and Scotland registered a fall in prices of 0.2 per cent and 1.9 per cent respectively - with costs still well below levels before the 2008 banking crash.

Mark Posniak, managing director at Dragonfly Property Finance, said: "The divergence between average prices in the North and South has become so extreme that the two are less divided than detached.
" If they can not live in London, people are opting to live just outside or within a commutable distance.
"Of all the regions, the South East is likely to thrive in the short to medium term as buyers look for greater value beyond the capital."
"It's possible that more homes may come onto the market in April as anyone considering selling does so in advance of the EU referendum.
"As we edge closer to the referendum and potential Brexit, caution among buyers is likely to rise and demand may taper off.
"With buy-to-let brought to heel and Brexit potentially looming, where prices are going next is becoming increasingly hard to predict."

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04 April 2016, 4:06