Just 17% of Chartered Surveyors think there will be an increase in property sales in the next three months according to the Royal Institute of Chartered Surveyors.
RICS say prices have been coming down since December as the market reached a peak due to the expected Buy to Let surge.
In addition, while house price inflation expectations peaked following the Chancellor’s Autumn Statement, with prices driven by speculation regarding an increase in investor demand, this trend is set to soften from March as investor interest dampens. Only 21% of respondents expect prices to increase over the coming months.
Simon Richardson, Chief Economist at RICS said: “The challenges facing the top end of the capital’s property market are clearly visible in our latest results. However, it is evident that the broader London market remains firm in the face of the on-going shortage of stock and pent up demand. Although agreed sales in February were strong, the dip in new buyer enquiries suggests that it might be reasonable to assume a slower market in the spring as a result of this change.
“Over the past three months, we have witnessed a surge in buy-to-let activity. Since the Chancellor made his Autumn Statement announcement last November, 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, with respondents still expecting them to rise by a further 25 per cent over the next five years.”
Andy Sommerville, Director of Search Acumen, said: “As expected, the residential market is now planning for the surge in buy-to-let purchases to begin tailing off. The rush is coming to an end as the April deadline nears, and this is likely to have a short term impact on sales and possibly prices over the next few months. This isn’t a slump by any means – new instructions and buyer enquiries continued to climb in February – but we may soon see a short lull in sales and price growth.
“The final scramble for properties before the stamp duty deadline is undoubtedly putting pressure on conveyancers to deliver in time for their clients. Some firms are feeling the strain more than others, but all are adapting the way they do business, such as greater use of technology, to keep their clients happy.
“But let’s not forget that the demand isn’t all from landlords. Help to Buy is making it easier for first time buyers to get onto the property ladder, and in London especially many are seeing the benefits of buying a property through Help to Buy rather than rent.
“Over the longer term, the impact of the buy-to-let surge and subsequent lull will be minimal. The structure of the property market and the pressure on the supply of new homes, particularly in the capital, is likely to see the long-term trajectory of sales and prices continue upwards.”
It follows on from the Council of Mortgage Lenders releasing data which showed a 22% increase in Buy-to-Let mortgages for January compared with twelve months previous, although the same data also showed a 7.8% dip from December. The CML estimate there were 9,500 buy-to-let purchases in January compared with 10,300 in December and 7,800 in January 2015.
The number of buy-to-let remortgages was up considerably more, with a 38% increase on twelve months previous, and 12.6% on December.
For First time Buyers and mover loans, the CML says both took a significant dive down 27.5% and 26.4% respectively. However both are up on twelve months previous by 6.5% and 10.9% respectively.
