Demand for SW homes increasing

The South West’s housing market has seen a rise in demand following the Government’s recent announcement that stamp duty is set to increase for buy-to-let investors, the latest survey by the Royal Institution of Chartered Surveyors (RICS) has revealed.

The RICS UK Residential Market Survey, December 2015, has shown that demand for new properties in the South West rose at the fastest pace in seven months with Chartered Surveyors citing a rush to beat April’s stamp duty rise as the reason.

From April, buy-to-let investors will be required to pay 3% more in stamp duty charges than residential buyers looking to purchase the same home. Since the Chancellor announced these measures in the Autumn Statement last November 25% more Chartered

Surveyors in the South West reported a rise in new buyer enquiries rather than a fall.

December also saw more newly agreed sales in the South West with 40% of respondents saying they sold more properties during the month than those selling less.  This compares to a net balance of 11% reporting a rise at the national level.

RICS Chief Economist, Simon Rubinsohn, said, “The housing market has experienced an unusually buoyant December. Those in the industry have been speculating that this is the result of the Chancellor’s announcement last November. Potential buy-to-let investors are looking to pick up properties before the increased stamp duty levy comes into force in April. If that is the case, then we can expect to see the housing market heating up further over the next few months.”

More parts of the UK saw a rise in new instructions to sell, however modest, rather than a fall for the first time in over two years. In the South West 18% of respondents said they saw an increase in new instructions rather than a fall while nationally a net balance of just 4% noticed a rise.

In the South West 39% more chartered surveyors expected to see a rise rather than a fall in prices over the next three months. The survey also revealed that house prices in the South West look set to rise by a further 4.4% per annum on average over the next five years, matching the headline UK expectation.

In December 52% more chartered surveyors saw house prices rise rather than fall in the South West. Despite this 71% of respondents said that price of houses in the South West offered ‘fair value’ with only 29% saying they were either expensive or very expensive given the relative benefits they offered. In comparison some 62% of respondents said that homes in the South East were either expensive or very expensive with only 36% saying they offered fair value.