Property Market Outlook Spring 2016
As ever the main question on commentators lips for the property market for Spring 2016 and beyond is quite simply will prices go up and down, and by how much? This requires crystal-ball staring as usual, but with the world economies being in a precarious position, and globalisation meaning problems in one part of the world can lead to knock-on impacts around the globe, there are other questions concerning property commentators this year too.
One of the questions is around interest rates, and whether these will be raised. As is known, the US central bank increased rates in December 2015 for the first time since 2006, with speculation that the UK would follow suit soon after. However whilst signs in the aftermath were that this might well happen, now it seems that interest rate rises are being put back and back, probably beyond 2016. Interest rates are particularly significant for the property market since when they go up mortgage rates invariably go up, and everyone feels it on their mortgages as repayments go up, particularly those who don't have much savings, and so it can work to suppress the market.
One of the other unknowns is what the change of taxation for those who own properties that they rent out will have - will it significantly deter people from buying second (or third, fourth...) houses and using them as a form of investment, and will they return to the stock market or other ways of investing their income for growth? From April 2016, there is a surcharge of 3% on stamp duty for anyone who is buying a home that isn't their main residence, however it's hard to tell what impact this will have until the change comes in imminently and data is collected over the following months to see how much of a deterrent this becomes.
Lots of first-time buyers of late have been helped by being lent money to buy a house by the government's Help To Buy schemes. Likewise the British economy has been doing well, certainly compared to large parts of the world, with less unemployment and generally positive signs (and some notable exceptions). As ever, the state of the British economy will be important as to whether house prices continue to rise, stay steady, or fall. And the other perennial - location - is also as important as ever. Will people finally be priced out of the market in the South East and thus prices will finally stop rising, or will they just go up and up forcing even more people to rent for the foreseeable future?
As ever, only time will tell what will happen. But it will certainly be interesting to see what impact the buy-to-let changes will have in the months after April and whether demand for second properties will have a significant impact on the market and dampen house price inflation or not.
More first-time house buying articles:
- What to Look For When Viewing a House
- Give Your Home New Life
- Why London Property Prices are so High
- Using Property Search Websites
- What is a Home Report?