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House price growth could slow down


House price growth will slow down over the next three months as tax changes take effect, according to the Royal Institution of Chartered Surveyors (Rics).

As of 6th April, second home owners and landlords will be charged 3% stamp duty when purchasing property.

This has caused a surge in buy-to-let activity, as investors are looking to beat the stamp duty surcharge.

Rics has therefore predicted that this will cause price growth to slow down, but that this will only be short-term.

Simon Rubinsohn, chief economist at Rics, said: "Investors have rushed to purchase homes before the stamp duty surcharge comes into effect. It is inevitable that over the coming months, April's stamp duty changes will take a little of the heat out of the investor market.

"While there remain significant doubts as to whether the government's plans to encourage a more robust development and construction pipeline will be sufficient to address the housing crisis, long-term price indications for the housing market remain strong."

Long-term growth

Despite predicting that house prices will slow down, they have maintained that the current long-term trend of steep price increases will continue.

Rubinsohn said: “The long-term price indications for the housing market remain strong, with respondents still expecting them to rise by a further 25 per cent over the next five years.”

The reason for this expected growth is due to a shortage in housing, which the government is trying to address via various schemes such as Help to Buy.

However, it has been clamed that even if the government builds 200,000 homes a year, these inflated prices would mean that up to 70,000 households would be unable to access the market every year.

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