Housing market slowdown expected from April.
In just under 4 weeks time, starting the 1st April the new stamp duty rate for buy-to-let investors and second home buyers comes into force, many are trying to beat the deadline so as to make the saving of the extra 3% they would be paying after the cut off date.
Agents and conveyancers alike will be under pressure to complete any outstanding purchases before the new tax rule comes into force, the normal time frame to complete is around 6 weeks, this can happen quicker on a cash purchase, with greater due diligence on mortgages the time frame can be considerably longer.
Due to the fact that a significant number of purchases have been brought forward to meet the stamp duty deadline, it will probably result in a lull in activity in the months following as these investement buyers are removed from the market, there could be a vacuum as possible first and second-time buyers are unable to meet the higher prices.
After April 1st and the stampede of buy-to-let and second home buyers subsides, experts predict a slowing in house purchase activity, prices are expected to dip as affordability takes control.
In their recent HPI report Martin Ellis, Halifax housing economist, reportedly said: “Increasing affordability issues, as house price increases continue to exceed wage growth, are likely to curb housing demand and cause price growth to ease.”
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