U.K. House Prices Increase as Tax-Holiday Rush Boosts Demand for Property
U.K. house prices rose the most in four months in February as first-time buyers looked for homes with “urgency” before a property-tax exemption ends in March, Acadametrics Ltd. and LSL Property Services Plc (LSL) said.
The average price of a home in England and Wales rose 0.2 percent from January to 219,844 pounds ($347,900), the groups said in an e-mailed report in London. From a year earlier, values fell 1.8 percent, the quickest pace since July.
“It will be interesting to observe the extent to which the market falls away in April once the tax-duty holiday for first- time buyers has ended,” said Acadametrics chairman Peter Williams. “But if there is better economic news in the spring months to come and mortgage supply continues to improve there is a sense that the market could continue to move forward.”
Manufacturing and services industries continued to expand in February, according to surveys this month, while Bank of England data showed mortgage approvals rose to the highest in two years. The increase in property demand reflects the March 24 expiration of a two-year stamp-duty holiday for first-time buyers purchasing a home for less than 250,000 pounds.
Out of the 10 regions tracked by Acadametrics, all apart from London and Wales saw their average values decline on an annual basis in the quarter through February, according to the survey. Values in the capital rose 2.4 percent.
Nationally, the number of transactions increased 21 percent to 52,000 in February compared with a year earlier, Acadametrics estimated. From the prior month, transactions rose 13 percent. While some demand is being driven by the tax holiday, Acadametrics said there has been an increase in the buy-to-let sector and, “with perhaps more competitive mortgage products available, we are seeing a slow return to normal levels.”
Acadametrics and LSL combine initial transaction data from the U.K. Land Registry and results from other price measures for their index of values.
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