End of stamp duty holiday pushing up sales, says RICS
House sales edged up in January as an increasing number of first-time buyers look to beat the end of the stamp duty holiday in March, according to the latest UK housing market survey from the Royal Institution of Chartered Surveyors.
The survey shows that 12 per cent more surveyors reported rises rather than falls in newly agreed sales in January.
From March 24, first-time buyers will no longer be exempt from stamp duty on properties worth less than £250,000, which some surveyors say is increasing transactions at the lower end of the market.
A net balance of 19 per cent of surveyors predicted transaction levels will pick up over the next three months, the strongest reading since May 2010.
Despite this optimism, property prices across much of the country continued to decline, with 16 per cent more surveyors reporting price falls rather than rises.
London saw the strongest price reading, while the West Midlands and Wales saw the biggest falls, with net balance readings of -54 and -41 respectively.
Supply remained relatively steady during January, with 7 per cent more surveyors reporting increases rather than decreases in new homes coming onto the market.
While slightly down on December’s figure of 11 per cent, this is the fourth consecutive positive reading for new instructions.
Alongside this, overall new buyer demand dipped slightly in January, demonstrating that the recent lift in activity has been driven by one-off factors, with 7 per cent more respondents reporting falls rather than rises in new buyer enquiries.
Despite a relative upturn in interest from first-time buyers prior to the end of the stamp duty holiday, surveyors report that lack of affordable mortgage finance continues to hold back the market.
Looking ahead, a net balance of 15 per cent more surveyors expect prices to continue falling over the coming three months.
RICS housing spokesman Michael Newey says: “With first-time buyers no longer exempt from stamp duty as of the end of March, it seems that some are looking to purchase homes before the deadline and, as a result, surveyors are relatively optimistic for the coming months.
“However, many problems with the market still exist and the lack of affordable mortgage finance is still preventing many from getting onto the property ladder.”
He adds that prices are still falling across most of the country, but expectations for future prices have become less pessimistic.