Interesting times in the housing market

We live in a prosperous area and this is reflected in the substantial increase in the value of
properties across our main area of operation. According to the LSL House Price Index April 2016,
West Berkshire and Reading values have increased 13.1% over the last 12 months followed by
Swindon 8.4% and Oxfordshire 8.2%. This acceleration in home values comes when many had
expected house prices to dip due to a natural decline in demand from buy-to-let and second home
buyers. However, after an exceptional March, there is now a potential shortage of properties on the
market, with fierce competition between buyers for each available property. Clearly, the
Government’s offensive against landlords has not eased the way for other buyers, as property prices
continue to pick up.
So what is going to happen to the future prices? There does appear to be a lack of supply which is
insufficient for the underlying demand that exists. We are a house buying nation and that culture
has not changed. According to the Office of National Statistics, there is some comfort from recent UK
construction output figures, house building was the bright spot for the industry in the first quarter of
this year although recently activity is weakening. There does appear to be a fall in the number of
new buyers probably due to uncertainty surrounding the EU membership referendum but also
confidence about the sustainability of the strength of the economy. In addition, the recent changes
in the additional stamp duty costs for buy to let properties and the changes in the tax relief
allowable may also be having an impact of the demand of additional properties being purchased by
buy to let properties.
It would be very surprising to see house prices continue to increase at such a rate that we have
recently experienced but nevertheless the pressure of demand and the lack of available properties
may ensure that there continues to be a rise in property for the foreseeable future.

The information contained within was correct at the time of publication but is subject to change.