UK house price growth speeds up in January as buy-to-let stamp duty hike looms
House price growth sped up in the year to January, new data showed this morning – suggesting buy-to-let investors are trying to sneak in those transactions before new stamp duty rules are introduced in April.
The annual figure was up from 9.5 per cent in December and nine per cent in November, according to Halifax's house price index.
In the three months to January, prices rose 2.2 per cent, up from 1.6 per cent in December. However, month-on-month they dipped slightly – from a two per cent rise between November and December to a 1.7 per cent rise between December and January.
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Meanwhile, Halifax pointed out that supply fell to a record low during the period.
The surge in growth comes ahead of a three per cent hike to stamp duty on buy-to-let homes, due to come into effect in April.
"It does appear that housing market activity is being lifted at the moment by buy-to-let investors looking to make a purchase before April’s rise in Stamp Duty for the sector," conceded Howard Archer, chief UK and European economist at IHS Economics.
"This could well exert upward pressure on house prices in the near term. Post April, this move may modestly dilute housing market activity and upward pressure on prices."
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, added that the sector is experiencing a perfect storm.
Read more: George Osborne is playing a dangerous game with London buy-to-let
"Lower mortgage rates have enabled households to take on more debt in the short-term, while the dearth of homes for sale has resulted in intense buyer competition.
"With wage growth set to strengthen in response to the decline in labour market slack, interest payments currently comprising only a small fraction of homeowners’ income and supply shortages unlikely to be resolved overnight, price gains look set to remain rapid in 2016."
