House prices continue to rise, says ONS
UK house prices rose by 9% in the year to March, and by 7.6% compared to the price in February, according to new data.
It takes the average house price to £292,000, according to the Office for National Statistics (ONS).
Split by country, house prices increased by 10.1% in England, by 2.1% in Wales, and by 6.4% in Northern Ireland. They fell by 6.1% in Scotland.
House price rises in England were driven by an annual increase in London (13%), the South East (12.2%) and the East of England (12.1%).
In March, London continued to be the English region with the highest average house price at £552,000, while the North East had the lowest average house price at £158,000.
Excluding London and the South East, UK house prices rose by 5.9% in the 12 months to March.
First-time buyers meanwhile paid 9.7% more on average in the year to March 2016 compared to March 2015, taking prices to £222,000.
For existing owners, prices increased by 8.7% over the same period, taking the average price paid to £345,000.
Stamp duty deadline pushing up prices
Richard Snook, senior economist at PwC puts the surge in prices down to buyers rushing to beat April’s stamp duty change.
“Housing transactions surged by 70% in March from a year ago, according to HMRC figures, as buyers rushed to complete purchases before the supplementary 3% Stamp Duty charge on second homes came into effect. This move undoubtedly drove up demand and prices in March and we would expect demand to soften over the next few months as a result.”
Jeremy Leaf, a former Royal Institute of Chartered Surveyors (RICS) chairman and north London estate agent, warns: “Lack of supply continues to be a huge concern and while the ONS takes some comfort from recent UK construction output figures, which showed that house building was the bright spot for the industry in the first quarter, this is potentially a last hurrah as confidence is likely to dip in response to weakening activity.
“People are nervous: there are short-term concerns about the market but longer-term fears about the strength of the economy. Brexit is a bit of a smokescreen - the strength of the economy is a bigger issue. While in the suburbs and outside the centre of London the housing industry is still confident, in the centre of London where there is oversupply and a lot of cranes, they are not.”
A hugely unpopular tax paid on property and share purchases. Stamp duty on property is levied at 1% for purchases over £125,000 (£250,000 for first-time buyers) which then moves up at a tiered rate. For property between £125k and £250k you pay 1%, then 3% from £250k up to £500k and then 4% from £500k to £1m and then 5% for properties over £1m. But unlike income tax, which is “tiered” and different rates kick in at different levels, stamp duty is a “slab” tax where you pay the rate on the whole purchase price of the property. On shares, stamp duty is charged at a flat rate of 0.5% on all share purchases. Figures correct as of May 2011.
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