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Homes with 3% surcharge 'made up 20% of late-2016 sales'

An analysis by Savills shows that so-called ‘additional homes’ - that is, those carrying a three per cent stamp duty surcharge - made up one in five of all sales in the second half of 2016.

The effect of the three per cent surcharge is not yet fully understood, says the Savills research team in its latest UK Housing Market Update.

Savills also suggests the data currently makes it impossible to identify the split amongst additional homes between buy to let purchases, holiday homes, and those ‘bridging’ purchases in circumstances where buyers have not yet sold their previous property.

In the wider market, Savills says recent slowdowns in price growth - as reported by Nationwide last week, for example - bolsters its prediction that the mainstream market will see no house price appreciation in 2017. 

The agency says the stronger-than-expected GDP growth in the final quarter of last year, driven by high levels of consumer spending and recent wages growth, may be tempered as 2017 progresses by rising inflation: Savills warns that the Consumer Price Index is predicted to rise from its current 1.6 per cent to around 3.0 per cent by next December “which will limit consumer spending power and house price growth.”

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