Stamp Duty reform set to support UK sales

Across the UK, 10 per cent more surveyors saw the number of potential new buyers decrease in December 2014. London saw the weakest demand, with 45 per cent more surveyors reporting a decline in enquiries – the eighth consecutive monthly decline.

The North of England and the South West saw strong rebounds in demand, although RICS notes that the underlying picture remains most upbeat in Northern Ireland and Scotland.

Despite the slowdown, though, there is optimism that the stamp duty reforms will deliver a 2-5 per cent boost in both sales and prices over the next 12 months, even with members in London expecting sales to decrease by between 5-10 per cent and prices to decrease by 2-5 per cent, with larger properties and/or those in prime areas expected to see the biggest price decreases.

“The changes to stamp duty are expected to provide a timely boost to activity in the housing market across most of the country but there remain significant challenges particularly for first time buyers seeking to take an initial step onto the property ladder,” comments Simon Rubinsohn, Chief Economist (RICS).

“The flatter trend in the market is partly a reflection of potential buyers becoming a little more cautious about making a purchase as more stringent lending criteria has made it harder to access mortgage finance. An increasing awareness of the approaching general election also appears to be contributing to the softer market if the responses to the latest survey are anything to go by. However, with new instructions still flat at a headline level as has been the case for most of the last year it seems implausible that the dip in demand will result in very much of a decline in house prices.”