Yorkshire's housing market set for slow down after stamp duty change

Yorkshire’s housing market may be set for a slow-down over the next three months, following a short-term rush on buy-to-let properties, the latest survey from RICS (Royal Institution of Chartered Surveyors) has revealed,

Respondents expected there to be a rush on buy-to-let purchases ahead of stamp duty increases coming into effect this April, and RICS’ survey revealed the past three months have proved particularly healthy for sales activity in Yorkshire and Humber.

Agents in Yorkshire and Humber sold an average of 24 homes between December 2015 and February this year.

This is the second highest result of all UK regions – agents in the East Midlands sold the most during the same time period – 33, followed by agents in the North West who sold 23 homes each during December-February.

Comparatively, agents in the West Midlands sold 19 homes over the same time period, whilst South East agents sold 17, and London agents sold the least – 10 - homes over the past three months.

However, looking ahead, only nine per cent of chartered surveyors in Yorkshire and Humber expect to see an increase in sales activity over the coming three months.

In addition, while house price inflation expectations peaked following the Chancellor’s Autumn Statement, with prices driven by speculation regarding an increase in investor demand, this trend is set to soften from March as investor interest dampens.

Only 21 per cent of respondents in Yorkshire and Humber expect prices to increase over the coming months.

The survey showed that house prices rose in February throughout most UK regions, including Yorkshire and Humber where 36 percent of chartered surveyors in the region reported seeing rises in house prices. East Anglia showed the sharpest price increases; 91 per cent of respondents in East Anglia said that prices had risen over the past month. London and the North East by way of contrast saw very modest gains.

RICS Chief Economist, Simon Rubinsohn, said: “Over the past three months, we have witnessed a surge in buy-to-let activity. Since the Chancellor made his Autumn Statement announcement last November, investors have rushed to purchase homes before the stamp duty surcharge comes into effect. It is inevitable that over the coming months, April’s stamp duty changes will take a little of the heat out of the investor market.

“While there remain significant doubts as to whether the Government’s plans to encourage a more robust development and construction pipeline will be sufficient to address the housing crisis, long-term price indications for the housing market remain strong, with respondents still expecting prices to continue to rise over the next five years.”