House prices rise amid slowdown warning
House prices rose by 5.5% in the first quarter of the year, amid a warning the rise will slow because of stamp duty.
Land Registry figures of all house sales give an average house price of £239,296, although this is skewed by London values. In central London prices rose by 1% to £1.373m.
However there were 135,367 sales across the country: an average of just 2,256 a day, about 40% below historical averages.
Property investment firm London Central Portfolio has warned that the market could be set for a slowdown as average prices near the threshold for the second band of stamp duty, when it rises from 1% to 3%.
'Stamp duty is the most iniquitous tax. Ordinary people will have already paid income tax on their earnings and then they are forced to stump up again to buy their family a home. When the tax was introduced it was never intended to be a tax on the every-man but now it is just another way for the taxman to dip into our pockets. Average prices have increased by over three times since the £250,000 threshold was introduced in 1997. It is time the Chancellor took action to enable people to trade up, freeing the market for first-time buyers,' says Naomi Heaton, LCP ceo.
She also warned that while growth in London sales had slowed a lack of properties on the market could easily create a property bubble.
'With transaction levels continuing to fall to just 1,271 – the lowest level since the depths of the Credit Crunch in early 2009 – it is likely that insatiable demand will force prices up again. Prime central London has been the engine driving UK property prices for the last four years. The number of transactions is at its lowest level since the Credit Crunch, but the causes are entirely different. In 2009 there were no buyers; in 2013 there are no sellers. Buying appetite exists, but that the best properties are few and far between.'