BTL boom responsible for doubling of house price growth

BTL boom responsible for doubling of house price growth

New data from the latest Your Move Price index has revealed that on average, property prices jumped 0.8% (£2,277) on a monthly basis in February - double the rise seen in January and fueled by a surge in BTL investment as landlords rush to beat the tax changes due to hit in April.

The demand from landlords and second-home buyers contributed to the surge in homes sales, up 12% month-on-month with the strongest sales seen in Sandbanks, with property purchases in Poole up 21% year-on-year due to demand for luxury flats.

The data revealed that London house prices gained £36,903 (6.8%) in the past year, exceeding the average Londoner’s £35,333 annual salary.
 
Hull’s house prices up 0.9% in a month to hit new record of £111,409, boosted by new jobs and City of Culture status.

Richard Sexton, director of e.surv chartered surveyors, comments: “House prices flew forwards in February, with the average home value in England and Wales increasing 0.8% (£2,277) during the month, equal to an average increase of £79 each day. This is double the 0.4% monthly growth seen in January, which could be as a result of buy to let investors rushing to complete quickly to avoid April’s additional 3% Stamp Duty surcharge, which has also seen sales shoot up 11.8% since January.

February’s house price growth is fantastic news for homeowners, particularly those considering cashing in on the additional demand and making the most of this sellers’ market. Typical property values are now £16,866 (6.2%) higher year-on-year; the fastest annual growth rate seen in eleven months, driven by the gulf in the number of aspiring home buyers, compared to the limited supply of homes for sale.


The East of England is outranking the capital with the fastest growing property prices of all regions, with a 7.2% uplift in the last twelve months. This pace is being fuelled by commuter towns, as London’s workers search for more affordable housing.

The trend towards higher house price growth in cheaper areas can also be seen elsewhere. While house prices in Yorkshire and Humberside have remained flat on a monthly basis, property values in the City of Kingston upon Hull have hit a new record of £111,409, up 0.9% compared to the previous month, as the city has one of the lowest average home values in the country. The upswing in Hull’s home values is due to the increase in new jobs resulting in more demand, with major firms including Samsung lifting employment in the city. Recently winning City of Culture 2017 may have provided an additional boost to demand for property within the city, as the pickup in tourism supports the local economy as a result of the award.

In London, house prices have climbed 6.8% year-on-year, to reach £582,783. This rapid escalation means that the typical home in the capital is now worth £36,903 more than twelve months ago, exceeding the Londoner’s median gross annual earnings of £35,333. Most of this jump in house prices again occurred in more affordable areas, with property values in the cheapest third of London boroughs going up 14.5% in the last twelve months. Despite the upswing in the capital’s overall property values, sales have slipped 4.6% in the three months November 2015 – January 2016, compared to the same three months one year earlier.

This is largely due to a lack of homes for sale combined with more caution at the top of the market, rather than a general decline in demand.

In fact due to the impending stamp duty hike, home sales have surged in February across England and Wales as a whole, with total home sales up 9.3% compared to the same month last year. The biggest boost in property purchases of any region has been in Poole, with a 21% upswing in sales. Luxury flats with views over Poole Harbour and Sandbanks have seen the biggest growth, as wealthy buyers seek to avoid the additional stamp duty surcharge which will apply to second-homes, as well as buy-to-lets.

Property prices have also risen as a result, up 11.6% over the year, as affluent buyers place a premium on luxury homes by the
sea.”

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Latest Comments

AbbieP.
AbbieP. 22 Jul 2016

"While house prices in the most expensive eleven boroughs have declined values in the cheapest eleven boroughs continue to rise" - not a nice way to even out the price range. London is overrated as it

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AbbieP.
AbbieP. 21 Jul 2016

And try to profit from your decisions, I may add

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CommercialTrust
CommercialTrust 19 Jul 2016

Retirement investment has always been one of the biggest draws of buy to let. And the buy-to-let demographic is, on balance, older. (Over a third of our applicants are over 50 at the time of application.) It...

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Forrest Wheatey
Forrest Wheatey 11 Jul 2016

I find the time perfect for ever home-owner wannabe. Prices should slowly, but steadily drop, at least for the inner buyer. Making it harder for outsiders to buy properties (the whole Brexit thing means...

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property guru
property guru 11 Jul 2016

Why should Ajay even have to be looking for it. It should be public knowledge. Why is not just publish each years and to were it is and be AUDITED. Accountability.

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property guru
property guru 11 Jul 2016

Surprise suprise

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CommercialTrust
CommercialTrust 30 Jun 2016

This is great news for buyers and investors in a period of significant uncertainty. The 10-year buy-to-let fix at 3.99% in particular is excellent, a clear 100 bps ahead of the nearest competition. Though...

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Lee
Lee 30 Jun 2016

Let's see what happens to north-east property prices when Nissan announce they're leaving.

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DmitriKara
DmitriKara 29 Jun 2016

I just read another article about eviction rising and this was exactly what was on my mind, Housing has become "cat and mouse"...

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DmitriKara
DmitriKara 29 Jun 2016

I am really not surprised. I've seen one too many impudent tenants and in my humble opinion renters have one too many privileges and options to abuse heir landlord in so many ways...

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DmitriKara
DmitriKara 29 Jun 2016

There is still so much uncertainty and I will surely step back and see what's happening before I could make any decisions on my end.

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ChristinaReedUK
ChristinaReedUK 20 Jun 2016

I don't understand why it's always a war between the two sides. Either, way the landlord is probably keeping a detailed inventory and will see the changes you've made. I just don't understand why there...

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