Two leading residential organisations have reported good, if somewhat temporary, news for the UK property market, mostly in the form of an increase in properties being put up for sale during January. The Royal Institution of Chartered Surveyors (RICS) have published the results of a residential market survey that revealed a significant bump in new sales listings during the first month of 2016, though it is still unlikely to help meet the current demand.
Buy-to-let investors increasing demand
Buy-to-let investors are the primary driving force behind the current demand on available properties, with the stamp duty changes due in April creating something of scramble to secure the purchase of properties before the higher fees are due. This increase in available properties being put on the market is actually only the third time it has happened in the past year and a half, but it is still simply not enough to satisfy the current demand for UK properties.
The RICS survey also revealed that 74% of those surveyed believed the purchase of these properties for buy-to-let purposes was only going to increase between now and the start of April, when a 3% increase in stamp duty is applied for all properties bought as investments such as buy-to-let.
The Chief Economist at RICS, Simon Rubinsohn, has been quoted as saying, ‘The rise in new [sales listings] in January, although modest, is very welcome. However, with buy-to-let investors rushing to get in to the market ahead of the stamp duty hike, the near-term pressure on prices is, if anything, intensifying despite a higher level of supply.’
House purchase approvals also increase
There has also been an increase in offers being accepted for properties during January to go hand-in-hand with the rise of available properties. The chartered surveyors, Esurv, have revealed that purchase approvals rose by a relatively huge 20.6% in January from December last year, which has actually seen the number of house purchase approvals reach their highest level since the recession.
Esurv’s Director, Richard Sexton, believes that buy-to-let approvals have significantly contributed to January’s growth in mortgage lending. He is quoted as saying:
“Concerns about the sector’s growth have sparked a wave of legislation, but as stamp duty changes come into effect this April, there’s been a rush to get buy-to-let loans approved. Many have predicted a narrowing of the buy-to-let sector but actually what we’re seeing in lending quarters appears to be the opposite.”
It appears that the current market factors are indicating that there will be increases in both rents and house prices in the near future. Obviously, this can be good or bad news depending on which side of the fence you’re on. Regardless, the increase in available properties is certainly something the UK property market needs right now, so hopefully the following months will see more of the same.
