UK Housing Market Survey House sales in the South West edged up slightly during January as an increased number of first time buyers looked to beat the stamp duty holiday, which expires in March, says the latest RICS UK Housing Market survey (14 February 2012).
15 per cent more surveyors in the region reported rises rather than falls in newly agreed sales since the beginning of the year. From March 24, first time buyers will no longer be exempt from stamp duty on properties under £250,000 and some surveyors note this has produced an increase in activity at the lower end of the market. In light of this, respondents were optimistic about prospects in the near term, as a net balance of 34 per cent of surveyors predicted transaction levels to pick up over the coming three months. This represents the strongest reading since August 2011.
In spite of this relative optimism, prices across the region continued to drop, with 37 per cent more surveyors reporting price falls rather than rises. Across the UK, London once again saw the strongest reading in terms of prices, while the West Midlands and Wales saw the biggest falls, with surveyors reporting net balance readings of -54 and -41 respectively.
Supply remained relatively steady during January, with 15 per cent more surveyors reporting increases rather than decreases in new homes coming onto the market. This is the third consecutive positive reading for new instructions in the region. Alongside this, overall new buyer demand dipped slightly in the first month of the year, demonstrating that the recent lift in activity has been driven by one-off factors, with 14 per cent more respondents in the South West reporting falls rather than rises in new buyer enquiries.
Despite a relative upturn in interest from some 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, while a cautious optimism surrounds future transaction levels, the same cannot be said for future prices.
A net balance of 33 per cent more surveyors expect prices in the region to continue falling over the coming three months.
Michael Newey, RICS housing spokesperson, commented: “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.
“Prices are still falling across the region, and expectations for future prices are also rather subdued.”