House prices seem to be rising inexorably.
House price inflation is at 8.9% – taking the average house price in England to £268,380. The volume of transactions are also up by about 30%.
Yet the monthly price change in April was – 1.9%.* Whilst we should not read too much into a month-on-month change, it might indicate a slowing of inexorable price rises.
The UK property market has continued to surprise. Given the country has been through the protracted Brexit negotiations and then had to face the Covid-19 pandemic, it has remained remarkably buoyant.
Arguably housing is often seen as a safe haven asset during times of political and economic volatility, which may explain some of this sustained activity.
Low mortgage rates**, meaning that borrowing is relatively more affordable for property investors and homebuyers alike, has sustained demand. All at a time when there is still a systemic supply imbalance, meaning prices are pushed up.
Anecdotally vendors have been maximising what they can achieve for their homes during the rush to hit the various SDLT holiday deadlines. This may have mitigated any potential tax savings for the buyer by baking them into vendor asking prices.
Timing entering the UK Property market?
There is never a ‘perfect’ moment for an expat to invest for the first time, but often it can come down to an individual vendor’s readiness to negotiate, not the whole market, although the market obviously influences vendor sentiment and price expectations.
There are indications the property market might now be less heated than it was. The latest Land Registry HPI for April shows that monthly price changes in England are down marginally. This coupled with the big SDLT savings being greatly reduced from 1st July may mean the rush and sense of urgency could abate in the Autumn/Winter period.
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My business focuses on helping time-strapped expats and busy business people who don’t have the local presence, or capacity, to acquire the ‘right’ properties for them. Property Venture® is an award-winning, Boutique property consultancy that finds the right investment properties for clients.
Disclaimer: Property Venture® is not a tax adviser but has outlined information in layman’s terms to enable top line comparisons, nor is it offering advice.
With regard to in-country legislation, letting licences and taxation laws, then you must take appropriate legal or taxation advice during your purchase process, at which time your solicitor or advisor will discuss with you up-to-date legislation and costs
*Office for National Statistics using the latest April data
** Bank of England Base Rate has stayed under 1%, for over a decade, significantly less than during the global financial crash when the base rate in July 2007 was 5.75%
Tags: Expats, investment, SDLT, UK