The Nationwide is warning that the busy start to 2016 in the housing market is driven at least partly by the rush to beat George Osborne’s stamp duty surcharge deadline of April 1 - meaning business will fall back in the spring and summer.
The lender, in commentary surrounding its latest house price index, says that number of mortgages approved for house purchase increased sharply in January to almost 75,000, up from around 71,000 approvals in December and the highest monthly number since early 2014.
However, this is largely down to buy to let and second home purchases ahead of April 1. “This is likely to have brought forward a significant number of purchases, which in turn will probably result in a fall back in approvals during the spring and summer” says Robert Gardner, Nationwide's chief economist.
Nationwide’s index shows that UK house price growth remained steady in February, with prices increasing by 0.3 per cent during the month, unchanged from January’s reading. The average house price in the UK is now £196,930.
It says annual house price growth has remained in a fairly narrow range between 3.0 per cent and 5.0 per cent since last summer
However, Gardner says that despite the likely fall back after April, improving employment prospects and continuing low interest rates should keep the market relatively strong.
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Where we are located, it is mostly FTB's we are dealing with, not investors. I do wish the mortgage providers would stop making statements about how the market is going to perform, as they did not make a good job of running estate agencies when they thought they could.
These predictions are largely pointless. You ask five different people, you get five different answers. It's all speculation, guesswork and could, woulds or shoulds. Truth is, no-one knows how the housing market will perform month to month. Many variables have an impact on it, both from a domestic and global standpoint. Trying to predict the future is just illogical and self-defeating.
I don't think anyone is predicting London prices will rise. 50,000 luxury flats being built, no buyers and existing buyers pulling out.
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