New data released by Rightmove shows House Prices reached a record high in April. This has occurred despite the nee stamp duty kicking in.
The 3% stamp duty increase, which came into effect on 1 April 2016, is part of the government’s attempt to slow down the buy-to-let market and free up more property for first-time buyers.
The average asking price for a property across England and Wales was £308,151, a monthly rise of 0.4% (+£1,118). Croydon was the leading property hotspot with asking prices jumping 18.6% on last year to an average of £298,770.
Rightmove director Miles Shipside said the rush of buy-to-let investors snapping up properties before the increase in stamp duty had added to the supply shortage issue in the market, pushing prices higher as a result.
"Estate agents have perhaps been focused on getting investor sales through to completion before the tax hike, and some may have been surprised by the continuing momentum and scarcity of stock to meet ongoing demand," he said.
"The net effect is eye-watering increases in asking prices in some towns, and is further stretching first-time buyers' affordability even though they are competing against fewer buy-to-let investors in the market." The report follows a data from RICS last Thursday which showed demand in the property market had weakened in April as homebuyers brought forward purchases to March to beat the increase in taxes. RICS's monthly house price balance edged lower to +41 in April from +42 in March, its lowest since June 2015.
A bigger jump occurred for first time buyers who purchase properties with 2 bedrooms or fewer.The price increased 6.2% to £194,224.
The lowest growth was in Wales, where average asking prices have risen 1.6% to £181,679.