Landlords across the UK racing to complete house purchases before the April deadline for the new buy-to-let Stamp Duty levy have helped key UK cities see property price rises faster than at any time in over a decade, it has been reported.
Hometrack has released its data on the state of the UK property market in the first three months of this year, and it found that rising cities with strong rental potential such as Liverpool, Southampton, Bristol and Cardiff have seen a combination of investor demand and seasonal uplifts help push prices up at a faster pace than any time since 2004.
Liverpool was at the top of the list, with house prices having climbed in a single quarter – between January and March – by 4.1 per cent. Only London, which usually sees price rises far faster than other places, could keep pace with Liverpool. Cardiff came next in the league table, with 3.5 per cent, followed by both Bristol and Southampton, both of which experienced price rises of 3.3 per cent.
Hometrack said that the reason cities such as Liverpool have seen such an influx of investment has been the down to the fact that it offers such attractive market entry prices, far lower than other major cities, with the promise of strong returns from rental income.
Looking at the rise as a whole, Hometrack said that these higher yields are something landlords are more acutely aware of now that the Stamp Duty levy has been looming over them.
Richard Donnell, insight director at Hometrack, said: “The acceleration in growth in the last quarter has, in part, been down to stronger demand from investors, especially those searching for higher-yielding property and seeking to beat the Stamp Duty deadline.
“We believe house prices will continue to rise but a moderation in investor demand and greater caution in the run up to the EU referendum will limit further acceleration in prices. Most likely the rate of growth will slow more rapidly in high-value, low-yielding cities such as London where prices will be more responsive to weaker investor demand,” Mr Donnell said.