New predictions from Cebr - the Centre for Economics and Business Research - show that UK house prices are set to increase by 4.9% in 2016. This follows growth of 6.7% in 2015 and 10.0% in 2014.

Cebr reports: ‘2016 will be a year of two halves for the housing market, especially in areas popular with BTL investors such as London. Price growth at the start of the year has been supported by a rush of BTL investors looking to beat the 3% stamp duty surcharge coming into effect in April. Leading indicators, such as instructions to sell and new buyer inquiries, suggest that H2 2016 will see a cooling in the housing market.

‘The slowdown in price growth will be a result of numerous, primarily demand-side, factors. Higher stamp duty on second homes comes on top of reductions in BTL tax relief that were announced in the July 2015 Budget. Both measures will make it less profitable, and therefore less attractive, to buy and let out a property. Additionally, the Bank of England has stated that it is considering restricting BTL lending.’