UK annual house price growth accelerated to 5.7% in March, according to the latest House Price Index from Nationwide.
This figure translates to an almost 1% monthly increase in UK property prices.
Stamp duty charges in the UK
Is this jump in property price growth set to continue, though? It is hard not to be aware of the recent change to Stamp duty charges in the UK. It has been a big talking point over the last few months.
Property investors looking to add to their property portfolio have been keen to process purchases before the new tax charges come in to affect. Constrained supply challenged by temporary strong demand, pushed prices up.
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Demand will see property price growth
Since the end of March, demand has faltered slightly, but other factors beyond the change in Stamp Duty charges are having a strong effect on the market.
Despite the slight fall in demand, the lack of supply to the market is still going to heavily outweigh the demand.
This will force house prices until the end of 2016 and possibly for the next 5 years.
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The number of houses currently available on the market remains at an all-time low.
While discussions are on-going about solving the current housing crisis. There is no firm course of action to solving the issue. The government has issued that over 200,000 houses should be constructed each year. Realistically, to have any real affect on the market, the number should be closer to 1,000,000 houses. A figure that is far from achievable within the current UK environment.
To conclude, the rate of property price growth may not be as dramatic going forward as in recent months, but rises are set to continue.
Property remains the best investment within the UK in 2016/7.