The Times have reported on a 0.4% fall in house prices during the month of June. Compared to the surge in transactions for the first quarter of this year, demand has now slumped. Landlords rushed to the market to snap up property before the 3% stamp duty surcharge came into effect.
In addition to this, the Bank of England has released figures on mortgage lending which show a significant dip in lending since the new tax came into force.
With this new tax and uncertainty over whether the UK would leave the EU, investors have been cooling their interest in buying property, waiting to see what a potential 'Brexit' would mean to property prices. There is a feeling that if increased restrictions were imposed on migrants moving to the UK, demand will fall for homes, causing a drop in property values.
Despite this first fall in house prices since 2012, rents are still expected to rise according to the Royal Institute of Chartered Surveyors (RICS). In addition, research published in the Financial Times (10th June) indicates that there was a large increase in the value of landlords assets over the last 12 months. The total value rose by £156bn to £1.2tn.