2016 property overview
by Housesimple on 12th December 2016
There's no doubt about it – 2016 was a turbulent year. With politics and celebrity deaths dominating the news, it's easy to forget that some pretty interesting things were happening in the housing market too. These are the property trends that had us all talking at HouseSimple HQ.
Brexit boosts foreign investment
Britain shocked the world in June by voting to leave the European Union (no one was more surprised than Nigel Farage, who had conceded defeat a few hours earlier). Although the vote had a knock-on effect on the value of the pound, it didn't hit the property market too hard. Ironically, the favourable exchange rate meant that foreign buyers were able to take advantage of lower prices, especially in and around London.
Big changes for buy-to-let
Buy-to-let landlords had a pretty tough year. New changes to stamp duty came into force in April, with an extra 3% added to the bill when buying an additional property. This led to a surge in buy-to-let purchases at the beginning of the year and a market 'collapse' towards the end. Sales were down 64% year-on-year in November, with a drop of more than 8% from October. With more changes to come, including a big cut to tax relief in 2020, the Residential Landlords Association claims that one in four landlords are currently planning to sell.
House prices continued to increase
Despite all of the political uncertainty and the decrease of landlord activity, house sale prices are slowly but surely increasing. According to Halifax, house prices are up 6% on last year (Nationwide puts the figure at a more modest 4.4%). The highest point this year was in March, just before the stamp duty changes came into play, when prices were up 10% on the year before. While this is great news for home owners planning to sell their properties, it also puts first-time buyers on the back foot.
Generation rent (and generation no mortgage)
The number of people who rent their homes has increased, but so has the number of people who have paid off their mortgage. According to the Office of National Statistics (ONS), more than a fifth of people aged 36-41 live in private rented accommodation and nearly a third of people own their properties outright.