Property prices increased in September, according to Nationwide Building Society, despite rumours of property tax hikes in the upcoming Budget . Speculation over changes to stamp duty , capital gains tax and council tax in the 26 November fiscal event have seen some buyers and sellers halt their plans. The average house price rose by 0.5 per cent over the month, its figures showed.
It means the average UK property is currently 2.2 per cent higher than a year ago, compared to 2.1 per cent in August. Northern Ireland continues to outperform the rest of the UK with house prices there growing 9.6 per cent year-on-year. Meanwhile, prices in Wales are up 3 per cent and in Scotland they are 2.9 per cent higher compared to this time last year.
The north of England continues to outperform the south of England, according to Nationwide. In the North, which includes areas such as Tyneside, Teesside and Cumbria, average prices are up 5.1 per cent year-on-year, according to Nationwide. However, house prices in Southern England, which includes the South West, South East, London and East Anglia, are up just 0.7 per cent over the past 12 months on average.
It comes as agents saying buyers and sellers are reluctant to act because of rumours Rachel Reeves will change property taxes on 26 November. This week, Zoopla said pre-Budget speculation has triggered a 4 per cent drop in buyer enquries for homes listed for £500,000 or more, compared with the same period last year. And Knight Frank, which recently revised its house price forecasts for the year down from 3.5 per cent to 1 per cent says it is seeing a similar impact blaming a combination of high supply and faltering confidence.
Tom Bill, head of UK residential research at Knight Frank, said: ‘High levels of supply and a growing sense of uncertainty as November’s Budget approaches are both keeping downwards pressure on demand and prices. ‘Stable mortgage rates so far this year have encouraged buyers to act but a repeat of last year’s game of ‘guess the tax rise’ ahead of the Budget means hesitancy will rise over the next two months, which prompted us to recently downgrade our forecast. ‘As it increasingly becomes a buyer’s market, sellers will need to be realistic with asking prices to get buyers through the door for a viewing.’
However, Robert Gardner, chief economist at Nationwide, remains more bullish on the prospects of the housing market in the months ahead. ‘Despite ongoing uncertainties in the global economy, underlying conditions for potential home buyers in the UK remain supportive. ‘Unemployment is low, earnings are rising at a healthy pace, household balance sheets are strong and borrowing costs are likely to moderate a little further if Bank Rate is lowered in the coming quarters as we, and most other analysts, expect.’
‘Providing the broader economic recovery is maintained, housing market activity is likely to strengthen gradually in the quarters ahead.’ ‘The market is ultimately driven by the forces of supply and demand – and this is where the gap between north and south is turning into a gulf,’ says buying agent Jonathan Hopper of Garrington Property Finders. ‘In the south, the abundance of supply compared to the number of buyers has allowed buyers to dictate the tempo.
‘Deals are still being done, but only pragmatic sellers are likely to succeed in what is a very price-sensitive autumn market.’ On the frontline Hopper says there is a clear distinction between those who need to move and those who want to. He says: ‘Needs-based buyers are progressing their plans but negotiating hard to de-risk against possible fiscal changes, helped by thinner competition from other purchasers. ‘Wealthier movers are delaying decisions until the Chancellor shows her hand.’
#House #prices #edge #September #Nationwide
