UK property asking prices rise in sign housing market has bottomed out
- 1.1 per cent monthly rise in asking prices at the start of spring season is a bigger than usual increase
- London landlords fed up with the capital’s high taxes and property prices are increasingly investing in other parts of the UK
Asking prices for British homes rose by the most in over a year in the four weeks to April 6, a survey showed, adding to other tentative signs that the housing market may have passed the worst of its slowdown ahead of Brexit.
The 1.1 per cent monthly rise in asking prices was a bigger increase than usual at the start of the spring season and reduced the fall in prices in annual terms to 0.1 per cent, property website Rightmove said.
Britain’s housing market has stumbled since the 2016 Brexit referendum with most measures of prices showing only minimal growth in recent months. But some data has suggested that the slowdown stabilised in early 2019.
Rightmove director Miles Shipside said last week’s delay of Britain’s exit from the European Union could spur hesitant home movers into action.
“We are not anticipating an activity surge, but maybe a wave of relief that releases some pent-up demand to take advantage of static property prices and cheap fixed-rate mortgages,” he said, noting visits to Rightmove’s website hit a record high in March.
‘Brexiety’ becomes a word as foreign investment in UK real estate drops to its lowest level since 2016 vote to leave European Union
Rightmove’s data is based on property advertisements on its website, which it says accounts for 90 per cent of residential property on sale in the United Kingdom.
Separately, London landlords fed up with the capital’s high taxes and property prices are increasingly investing money in other parts of the UK.
About 60 per cent of London-based landlords bought properties elsewhere in Britain in the last year, up from 25 per cent in 2010, according to broker Hamptons International. The trend has sent money rushing into the North of England and the Midlands, a region that includes such major cities as Birmingham.
Hong Kong buyers expect further declines in London home prices, delay investment
The shift has been driven in part by a tax paid by buyers of residential property that averaged £24,600 (about US$32,000) in London in the last year, compared with £5,330 outside the capital, according to Hamptons. That bill has increased since changes were made in 2016 to the so-called stamp duty land tax, adding a surcharge for buyers of second homes that affected individuals and corporate investors.
“Following the tax hike, landlords have been adapting their strategy to find new ways to make their returns,” Aneisha Beveridge, head of research at Hamptons, said on Monday. “Lower entry costs and higher yields outside the capital are enticing investors to look further afield than they have previously.”
The cost of renting a home in London rose by 3.7 per cent in March to a record £1,737 pounds a month, according to Hamptons. That is 2.3 times higher than outside the capital, the broker said.
