Stamp Duty reform set to boost UK property sales
House price growth in November dipped for the sixth consecutive month, but Stamp Duty reforms see surveyors forecasting a sales boost of between 2-5%, according to the latest RICS Residential Market Survey.
Despite 15% more surveyors reporting a decline in new buyer enquiries and a fourth consecutive fall in supply to the market, surveyors are expecting more house sales in response to the reforms, although expectations in the capital were more muted.
As speculation continues over how much the new changes will encourage existing property owners to put properties on the market, the reforms come in a month that saw house price growth fall to its slowest pace since May 2013 (a 13% net balance) and the number of houses for sale per branch fall back to its second lowest reading of 56.
It was also clear from member comments that uncertainty surrounding the outcome of the forthcoming general election is providing potential purchasers with a reason to sit on their hands and new buyer enquiries have now declined for five consecutive months.
Across the UK, price growth was strongest in Scotland and the South West (both a net balance of 37%) and weakest in the North of England and London.
Meanwhile in the rental market, tenant demand was steady in November, but landlord instructions declined for the eighth successive month and member’ forecasts for rent over the next 12 months now stand at 2%.
Simon Rubinsohn, RICS Chief Economist, said:
“The Stamp Duty reform could reverse the softer trend in buyer enquiries that has been visible in recent months but a critical issue in terms of how it plays out with prices is whether it also encourages more vendors to consider putting their properties back onto the market. The expectation from members that transactions could increase by up to 5% over the next year on the back of this measure suggests that there is a belief that supply will indeed respond to the tax change. This is all the more important given that the latest RICS data suggests that the average level of inventory on surveyors’ books is close to a historic low.”