2015 in property: what does the research tell us?

The end of another year: time to review the research...

The end of another year: time to review the research... - Credit: Archant

Savills UK head of residential research shares his views on 2015

While the additional stamp duty charges for buy to let investors and second home owners announced in the Autumn Statement a couple of weeks ago are unlikely to have a significant impact on the outlook for the UK housing market as a whole, there will be a number of sub-sectors where the impact is most felt.

The prime London housing market has already been weighed down by the changes introduced in last year’s Autumn Statement. However, evidence to date suggests that the stamp duty take from this part of the market has risen slightly. The likelihood is that this will further suppress transactions and prices in the prime central London market, given the extent to which this market has been supported by purchases from second home owners and investor buyers; meaning the ability for this additional levy to generate greater revenue from these buyer groups is less assured.

More generally, buy to let investors are likely to display greater caution faced with higher transaction costs. This is likely to be greatest among those with substantial debt who are also affected by the changes to tax relief that were announced in the July budget. These buyers have historically been attracted to new build housing. That means once the changes are introduced, house builders will be less able to rely on this type of buyer and will have to focus more on demand for the shared ownership, starter homes and help to buy product that is supported by other Government policy.

However, in the short term there is little doubt that some buy to let investors will bring forward their planned purchases to beat the April 2016 deadline including those looking to extract cash from their pensions.