House price growth was 9.2% in April 2016 compared to 10.1% the previous month, according to Halifax.
The slowdown in growth follows a surge in buy-to-let activity before the introduction of new stamp duty land tax (SDLT) rates on 1 April 2016.
50% of properties sold in the last 2 weeks of March went to landlords, while February 2016 saw a 61% year-on-year increase in buy-to-let loans, according to the Council of Mortgage Lenders.
Halifax housing economist Martin Ellis, said:
“Current market conditions remain very tight as the severe imbalance between supply and demand persists. This situation, combined with low interest rates and rising employment and real earnings, should continue to push house prices up over the coming months.”
Property tax changes
A 3% SDLT surcharge was introduced for purchases of additional residential properties from 1 April 2016. Similar changes were made to land and buildings transaction tax in Scotland.
Other tax changes may also affect individuals who are buying or selling second homes or buy-to-let properties. The wear and tear allowance has been replaced by a relief that enables landlords to deduct actual costs from a property.
Private residence relief means that capital gains tax is not usually payable on gains when you sell your main home. If this does not apply, the tax rates for 2016/17 are 18% for basic rate taxpayers and 28% for higher rate taxpayers.
Contact us today to talk about property taxes.