New tax year, tougher lending rules?

6 Apr 2022

Will higher National Insurance squeeze house prices?

The fortnight in five seconds

  • Homeowners 'would be happy if prices didn't rise'...
  • ...but price growth is fastest since 2004
  • National Insurance and dividend tax rates rise
  • Market view: affordability fears start to show
  • Movewise news: bringing hassle-free sales to probate solicitors

Homeowners 'would be happy if prices didn't rise'...

We read an interesting report last week which claimed that the majority of British homeowners would be happy if their homes did not rise in value over the next 10 years, if that meant property was more affordable for those who are unable to buy. The survey, carried out by the not-for-profit Positive Money, also found that two-thirds of people believe the Bank of England should have targets to control house-price inflation, similar to its retail price inflation targets. The report also challenges the idea that it is lack of housing stock that has caused prices to soar, blaming instead 'the transformation of homes into financial assets'.

...but price growth is fastest since 2004

Those homeowners are not getting their way yet, as UK house price growth climbed to its highest level in 18 years in March. The year-on-year increase, according to the Nationwide, was 14.3%, with the average house costing £265,312, or 21% higher than at the start of the pandemic two years ago.

National Insurance and dividend tax rates rise

The start of the new tax year adds a further squeeze to mortgage affordability, especially for business owners whose income takes the form of dividends. On top of the general rise in National Insurance from 12% to 13.25%, the rate of income tax on dividends will also rise by 1.25 percentage points. With interest rates likely to rise further over the coming months, those with fixed-rate mortgages coming to an end could find themselves unable to remortgage.

Market view: affordability fears start to show

Our property team are beginning to see more signs of concern over mortgage availability. Property advisor Adam says: "We had a sale fall through with the buyer quoting concerns on rising interest rates. So far it's an isolated incident, but it will be interesting to see if it grows." At the moment we are not expecting prices to fall any time soon, but the current rate of growth surely cannot continue for long.

Movewise news

Catch up on our auctions webinar

We have some exciting partnerships to announce in the coming weeks, beginning with two collaborations with the legal industry.

Today's Wills & Probate

First of all, we are delighted to join forces with Today's Wills & Probate, which provides daily news, industry insight and best-practice content for its growing readership of solicitors and will writers. We're looking forward to sharing our property sales expertise with probate solicitors, ensuring that they can deliver maximum value to the beneficiaries of the estates they handle. 

UK Probate Research Awards

And staying within the probate sector, we are also proud to support the UK Probate Research Awards, which take place in London on April 28.

Meet the team

This week, it's time to find out a bit more about James:

James Donohue

Ten questions with James

Name? James Donohue.

Role at Movewise? Partnerships Director.

Can you describe your job in three words? Engaging, energising, dynamic

What was your first job? Hospitality at Old Trafford.

What would be your dream home? A period property on the beach with a panoramic view of the sunrise.

Where is your favourite place to be? Santorini, Greece – amazing sunsets and great food!

What’s the best piece of advice someone has given you? When I became a father, my Dad said: “The days are long, but the years are short, so enjoy every moment.”

Who would be your ideal dinner party guest (living or dead)? Sean Lock. A great comedian, gone too soon.

What are your three Desert Island Discs? The Stone Roses, The Smiths, New Order.

Do you have any hidden talents? I played bass guitar in a band.

As always, if there’s a topic you’d like to see covered to covered in a future newsletter or in one of our web articles, please drop me a line at robk@movewise.co.uk. Or if you want advice from our property experts, get in touch.

Have a great week!

Rob and the Movewise Team

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