Top 3 Things I Learned From UK Property Trends in 2016
From the increase in Stamp Duty to the Brexit, there were some major changes within the UK that have certainly changed the housing market. Whether it is for the better or worse remains to be seen in 2017. The Stamp Duty introduced a couple of years ago had already started making an impact at the top of the market where owning a second home attracted a higher duty rate. That made it a little bit more expensive to own two homes.
As if that wasn’t enough, the Brexit polls had started triggering some uncertainty in the market and the fact that the referendum passed in favour of Brexit made it even more uncertain as to where the UK property market will head. Even greater uncertainty was brought about in the somewhat ‘labour specific’ HMO niche where most immigrants get their housing. These two factors have definitely impacted the market and will continue to do so into 2017. Here are the top 3 things I learned from UK property trends in 2016.
As far as the buy to let market is concerned, the only issue that came up was the Stamp Duty increment. Statistics show that there was quite a bit of movement in the market as sales boomed just before the introduction of the higher duty.
According to CML (Council of Mortgage Lenders), the number of mortgages advanced for that period was about triple the number that was advanced for the same period in 2015. But because of the Stamp Duty increment and even tougher affordability checks on mortgages associated with the buy-to-let market, this growth is expected to slow down significantly.
The rental market
The rental market, on the other hand, has seen the exact opposite reaction. Most parts of the country saw a flood of rental properties hitting the market and that has brought rental prices down with London hitting 0.7% lows. This is much lower than what it was in the previous year. That trend, however, is forecasted to reverse as prices stabilise and even creep up. London is expected to see a 3% increase in rents for 2017.
What about housebuilding?
2016 trends show that housebuilding has recovered well since the financial crisis that hit the market a few years ago. As things stand, in 2016, the housebuilding market saw an increase of 4% in new additions to the market. But, even though there are calls for 300,000 more new houses per year by a House of Lords committee, there are fears that this number may not be attained and even that the previous number of 147,800 new houses may drop. This is largely due to the current market uncertainty. What with the Brexit and all.
If 2016 trends have taught us anything is that the housing market has all but fully recovered now from the financial crisis of the years past. There are, however, concerns over the commencement of Brexit and the higher Stamp Duty charges might create a bit of hitch, but all in all, the outlook is pretty positive.