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TODAY'S OTHER NEWS

Buy-to-let boom and Brexit create "climate of uncertainty"

The housing market is facing a “climate of uncertainty” as the UK waves goodbye to buy-to-let boom, according to the Royal Institution of Chartered Surveyors (RICS).

The stamp duty surcharge, Brexit referendum and a weaker pound are all taking their toll on the housing market.

Short-term confidence in market is now flattening following the winter buy-to-let rush, according to the RICS UK Residential Market Survey for March.

The rate of house price inflation is slowing with RICS indicators pointing to more modest house price gains.

These factors have been most strongly felt in central London, where 38% more respondents expected to see house prices fall than rise over the next three months.  

Across the UK, 2% more respondents expect to see prices fall rather than rise.

However, surveyors still expect prices to rise by more than 4% each year for the next five years across England and Wales, with prices in London projected to grow by 3% each year.

RICS chief economist Simon Rubinsohn said: “As expected, the buy-to-let rush has now run its course, and as a natural result, the market is starting to slow.

“But there are other significant factors currently weakening short-term confidence in the UK property market.

“The EU referendum is likely to be an influencer in terms of the damper outlook for London in particular. 

“However, in the long-term, the imbalance between demand and supply will still exert a strong influence on the market, with house prices expected to rise by close to 25% over the next five years.” 

David Bird, director of Online Mortgage Advisor, has said that although buy-to-let demand may fall due to the stamp duty increases and reduction in tax relief, there will still be significant interest from serious investors.

“They will be looking harder at ways of reducing the costs associated with buy-to-let property."

As we reported yesterday, buy-to-let lenders are slashing mortgage rates and Bird said this should drive demand.

“Mortgage interest rates will be one of the primary considerations for investors as it will have an immediate and significant month-to-month impact on their bottom line.”

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