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UK house prices forecast to rise by 6.5%

  • While no measures were announced to ease the burden of additional stamp duty costs, landlords across the country will be breathing a sigh of relief that no further taxes were inflicted on them by Chancellor Philip Hammond in the Spring Budget.
  • Meanwhile, alongside the Budget, the Office for Budget Responsibility revealed their latest economic forecasts. Reflecting a stronger economy than previously anticipated, economic growth for 2017 has been revised upwards from 1.4% to 2%. Growth is expected to slow to 1.6%, however, in 2018.
  • At the same time, house prices are also expected to rise in 2017 at a higher rate than expected when the last forecasts were published in November last year. Prices are now expected to rise by 6.5% this year, slowing to 4% in 2018.
  • While it is acknowledged that transaction levels are lower than in previous years and will continue to be more muted for some time, the OBR still expect receipts from stamp duty from residential property to rise from £8.3 billion in 2016/17 to £13.1 billion 2021/22. The amount of SDLT collected from the additional 3% surcharge on second property purchases is expected to rise from £1.4 billion in 2016/17 to £2 billion in 2021/22. The promise of this increased income was perhaps too tempting for the Chancellor to ignore!

 

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