UK prime cities house price grows faster

prime-london-price-fallsHouse prices growth in UK prime cities was more than 4% higher in the first quarter of this year, the highest for 12 years. The normal seasonal rise in demand was boosted by investors rushing to beat the stamp duty deadline. According to Hometrack house price index, the tougher lending criteria and tax changes are likely to push investors into higher yielding, lower priced markets, and city level house price growth is expected to be reasonable in the second quarter of the year; overall the annual growth for the prime cities house price index is leading at 10.8%, ahead of 8.7% across the UK as a whole.

With the rush to beat the stamp duty deadline now over, the difficulty is how the weaker investors’ demand will impact house price inflation in the second quarter of 2016. Experts believe that house prices will continue to rise but a control in investor demand will limit further acceleration in house prices. The rate of house price growth to get slow in high value, low yielding cities, where house prices will be more approachable to weaker investor demand.

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