Independent advisory body expects increase is a result of Stamp Duty Land Tax changes
House prices in the UK could rise by as much as 0.3% over the course of 2018, according to recent figures following the Autumn Budget announcement.
The Office for Budget Responsibility (OBR), which exists to prove independent analysis and forecasts ahead of the Budget, believes the move to abolish the tax on properties valued up to 300k will only benefit existing homeowners and not the first-time buyers it was designed to assist.
Removing the tax is expected to create a surge in demand, which would give sellers the advantage as they could raise their prices as their property becomes more desirable, cancelling out any money buyers may be saving from the tax change.
Miles Shipside, the director for Rightmove, believes this will be the case, saying ‘First-time buyers should think twice about acting quickly to take advantage of this stamp duty ban.
‘The extra demand it creates pushes up prices and starts eating away at the extra cash this stamp duty exemption will free up.’
Elsewhere in the Budget, the Chancellor promised 3bn to small and medium sized house builders in order to meet the government’s new target of 300,000 homes a year.