U.K. House Prices Supported as Investors Try to Beat Tax Hikeby
Price gauge shows half of agents report rising prices
Expectation gauge suggests property momentum will continue
U.K. house-price growth maintained momentum in December as a shortage of properties for sale provided support and buyers tried to beat a planned tax increase later this year.
The Royal Institution of Chartered Surveyors said on Thursday that its price gauge rose to 50 from 49 in November, matching the median estimate in a Bloomberg survey of economists. In London, the measure picked up to 25 from 19.
Buyer inquiries outpaced new instructions to sell for an 11th month, highlighting the supply-demand imbalance that underpinned the property market throughout 2015 and looks set to remain a factor this year. An additional lift came from the buy-to-let market, with people looking to get ahead of tax increase announced by Chancellor of the Exchequer George Osborne helping to create an “unusually buoyant” December, RICS said.
“Investors are looking to pick up properties before the increased stamp duty levy comes into force in April,” said Simon Rubinsohn, RICS chief economist. “If that is the case, then we can expect to see the housing market heating up further over the next few months.”
In a sign momentum may continue, a measure of price expectations for the next three months jumped to 43, the highest since April 2014.
From April, buy-to-let properties and second homes in the U.K. will be subject to a stamp-duty home buyer tax 3 percentage points higher than those who are purchasing a property to live in. The chancellor announced the measure last year, as part of a bid to bolster the supply of housing and help first-time buyers.