Liquid error: wrong number of arguments (2 for 1) Property prices dip in England and Wales after mad March buy to let rush | Marsh & Parsons Sales and Lettings Estate Agents London

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Property prices dip in England and Wales after mad March buy to let rush

Wed 27 Apr 2016

Property prices in England and Wales fell by 0.5% in March, taking the average price of a house to 189,901, the
latest land registry figures show.

This takes annual house price growth to 6.7% but prices vary according to location with London and the East of
England the only two regions with month on month growth.

In London property prices increased by 0.2% month on month and by 13.9% year on year, taking the average
price to 534,785. In the East of England price were also up 0.2% month on month, taking annual growth to
10.7% and average value to 220,989.

Everywhere else in England and Wales prices fell month on month with the steepest fall of 2.6% in Yorkshire and
Humber, followed by a fall of 2% in the West Midlands. Prices fell by 1.2% in the North East, by 0.9% in Wales
and the South West, by 0.4% in the South East, by 0.3% in the East Midlands and by 0.1% in the North West.
Year on year prices were up everywhere apart from the North East where annual growth was down by 0.7% to
97,581. Prices were up 10.3% in the South East, by 5.8% in the South West, by 5.7% in the East Midlands, by
5.3% in the North West, by 3.5% in Wales, by 3.1% in the West Midlands, and 1.6% in Yorkshire and Humber.
Experts point out that the fall in prices should not be a surprise after a mad rush in March as buy to let landlords
and second home buyers sought to beat the introduction of a 3% stamp duty surcharge on additional homes that
came into force on 01 April.

David Brown, chief executive officer of Marsh & Parsons, believes that there is still a lot of energy in the first time
buyer market for other owner occupiers unaffected by the stamp duty chance. This should step up to fill any
momentary fall back in investor demand, and keep prices on course. In London, there are 14 buyers competing
for every available property on the market, which will keep the wheels of growth moving, he added.
According to Andy Knee, chief executive of LMS, the monthly dip will cause hopeful home buyers to breathe a
sigh of relief that house prices have not stretched further out of reach.

But year on year, a 6.7% rise across England and Wales is cause for concern. In London particularly, where
house prices rose 13.9% annually to exceed an average value of 534,000, homeownership is fast become
possible for only the very wealthy, he said.

Despite government intervention to aid first time buyers, such as Help to Buy, Starter Homes and the Lifetime
ISA, these schemes fall short of making property more affordable for millions, he pointed out and added that
uncertainty over the referendum in June on the future of the UK in the European Union could have an effect.
But he does not think that property prices will be affected drastically in the run up to the referendum vote on 23
June. Supply of housing remains critical and addressing that is the only way to keep pricing within reach for
many. The housing market appears to be robust, but a healthy market is reliant upon first-time buyers and home
movers being able to keep pace, something that cannot happen if house price rises continue, he said.
The stronger house prices growth seen at the beginning of the year is unlikely to return in the short term,
according to Jonathan Hopper, managing director of the buying agents Garrington

But with demand still holding up, and a severe shortage of supply in many areas, we should expect to see more
steady price rises during the summer months. Marchs dip in prices is likely to presage a return to more normal
rates of price growth rather than a serious slowdown in the market, he said.

Even though its annual level of price growth remains close to 14%, Londons extraordinary run of price rises has
slowed dramatically as international buyers hold off on purchases until the Brexit uncertainty is past. Elsewhere,
levels of buyer confidence remain solid, but with the surge in purchases by buy to let buyers now over, sellers
now need to think more carefully about pricing competitively, he added.

Low interest rates will continue to drive demand, according to John Eastgate, sales and marketing director of
OneSavings Bank and he added that an ongoing shortage of new houses in the UK is holding back supply.
Property values may see monthly fluctuations, but these underlying fundamentals are set in stone, and will
continue to support prices in the long term, he said.

The small dip is good news for first time buyers, said Rishi Passi, chief executive officer of Oblix Capital. Prices
may well moderate further in the coming months as we witness the full effect of the new tax burdens on buy to let
landlords. The possibility of a Brexit may also make some pause for thought, but in the longer term, infrastructure
projects confirmed in the Budget such as Crossrail 2 and HS2 provide a strong foundation for the future of the
property market, he pointed out.Property Finders.

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