House sales boost following stamp duty reform expected by UK surveyors
Although house price growth declined in November, George Osborne’s overhaul of stamp duty is likely to boost sales, a UK Residential Market Survey carried out by the Royal Institution of Chartered Surveyors (RICS) found.
In November, house price growth fell for the sixth successive month, but the new stamp duty arrangements have led to chartered surveyors predicting a sales boost of 2% to 5%.
Even though surveyors reported fewer buyers in November, they believe the reforms will lead to more house sales. This optimism, however, was more muted in London, the RICS informed.
The reforms came in a month that posted the lowest house price sales growth since May 2013, plus the total number of houses for sale declining significantly.
House price growth was steepest in Scotland and the South West, and weakest in London and the North of England.
Mr. Blackburn believes supply will respond to the tax changes.
Tenant demand in the rental market 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%,” the RICS reported.
The RICS believes the stamp duty reform could turn around this softer trend in buyer inquiries. We now have to wait and see whether more vendors will consider putting their homes back onto the market.
The RICS wrote:
“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.”
Head of Policy at RICS, Jeremy Blackburn, said:
“It’s no surprise that surveyors are expecting an uplift in the market in response to the long overdue reforms to the stamp duty tax system which the Chancellor himself called ‘the most damaging tax of all’.”
“Removing the ‘dead zones’ will reduce the distortion in the market and ensure that those at the top end of the market will now contribute fairly, while those at the bottom will be given a fairer chance to get on the ladder.”