Agreed house sales surged in March as the extension of the stamp duty holiday had an immediate impact on the housing market.
Half of property professionals reported an increase in agreed sales during the month.
This marked the strongest rise in agreed sales since August 2020, according to the Royal Institution of Chartered Surveyors.
Cardigan in Pembrokeshire, Wales. House prices were reported to be on the up across all of the UK’s nations and regions in the latest Rics residential market survey
The stamp duty holiday, which saves buyers up to £15,000 in taxes, had been due to end on 31 March, but this was extended in the Budget on 3 March.
The stamp duty ‘nil rate’ band will now not revert to normal levels until the autumn.
Currently, buyers do not pay any stamp duty on the portion of a property purchase under £500,000.
This will fall to £250,000 from 1 July, and from 1 October it will return to £125,000, where it usually sits.
In line with this surge in agreed sales, more property professionals said they believed house prices to be rising.
With demand for homes continuing to outstrip supply, 59 per cent of surveyors said they had seen an increase since February’s survey was published.
This was more than the 52 per cent who reported in increase between January and February.
Property professionals reported that house prices were rising, with 59% saying they had seen an increase since February’s survey was published
Simon Rubinsohn, Rics chief economist, said: ‘The results from the latest Rics survey show that the decision of the Chancellor to extend the stamp duty break and then taper its expiry has had an immediate impact on the housing market, with all the key activity indictors rebounding in March.’
House prices were reported to be on the up across all of the UK’s nations and regions, with the strongest momentum seen in the north west of England, Yorkshire and the Humber and Northern Ireland.
In addition, more estate agents said that they thought house prices would continue to grow in the longer term.
As such, 60 per cent of surveyors expected prices to be higher rather than lower in 12 months’ time.
UK housing transactions increased by nearly a quarter in February, according to HMRC
This was a marked increase on the 46 per cent who said the same in February and 30 per cent in January.
Rubinsohn described this level of house price inflation as ‘worrying’.
He said: ‘The headline numbers as well as the anecdotal remarks from respondents clearly demonstrate that across much of the market, demand is outstripping supply and that as a result, prices continue to move upwards.
‘More worryingly, this is also being reflected in the price expectations data both at the 12 months horizon and beyond.’
Surveyors were slightly less bullish about the housing market’s prospects going in to the summer.
Of those surveyed, just 35 per cent predicted an uptick in house prices in the next three months. However, this was the most upbeat reading on this measure since January 2020.
There were indications that the supply of properties coming on the market could increase in the coming months, with a net balance of 29 per cent of surveyors reporting an increase rather than a decrease in appraisals.
Looking at the rental market, tenant demand increased while new instructions from landlords decreased.
Professionals generally felt this would place an upward pressure on rents, and London was the only part of the UK where rents were expected to remain the same or fall.
Rubinsohn said that the market was less attractive for landlords at the moment, meaning that supply of rental homes was down and therefore rents were increasing.
‘Significantly, despite rents moving higher, contributors continue to point to the less favourable environment for investors in the market as playing a key role in fuelling this imbalance,’ he said.
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