Housing market set for "bumpy ride" in 2016

The UK housing market is in for a bumpy ride next year as new property taxes hit sales and prices.

Higher stamp duty on more expensive homes has already hammered transactions at the top end of the market, and buy-to-let is next in line.

James Wyatt, partner of prime Surrey estate agency Barton Wyatt, said the “staggering array" of extra property taxes have already hit the market.

“Receipts are forecast to be down by nearly £1 billion this year, mainly as a result of 10-12% lower transactional levels.

“The top end of the market over £5 million is in the slaughterhouse with 12% stamp duty killing off the golden goose.”

The 3% surcharge on stamp duty for buy-to-let, recently announced by Chancellor George Osborne and set to be introduced in April, will also hit the market.

This is another Government stab in the back for those investing for their retirement, Wyatt said.

“Watch very strong sales up to £300,000 in the first quarter then listen to the tumbleweed.”

Wyatt expects UK base rates to increase in the third or fourth quarter of 2016. “Despite its inevitability, the increase will spook just about everyone with mortgages.”

He said the good news is that 10% deposit mortgages are back and 2016 will see a strong first time buyer market in most areas.

“Major towns and cities outside London may see prices increase by 10%.”

Wyatt said £2 million-plus properties in the Home Counties will be hit hard and the capital will also suffer.

“London will probably be nursing a property hangover for all of 2016. It's a rocky road ahead. Make sure your seatbelt is on!"