Specialist Mortgage Advice Hertfordshire & Cambridgeshire

Specialist Mortgage Advice Hertfordshire & Cambridgeshire

07956 982 986

82 Sunnybank Road Potters Bar Hertfordshire EN6 2NF

Alex Pangratiou

Housing activity stagnates despite stamp duty cut

Jan 22, 2018

The UK housing market saw activity fall in December despite the first-time buyer stamp duty cut, the December 2017 RICS UK Residential Market Survey found.

Some 86% across the UK said they hadn’t seen an increase in first-time buyer enquiries following a cut in stamp duty.

After new buyer enquiries came close to stabilising in November, 15% more respondents noted a decline in demand (as opposed to an increase) in December.

Simon Rubinsohn, RICS chief economist, said: “The initial feedback from the market doesn’t suggest that the change in the stamp duty regime announced in the budget is going to have a material impact on activity.

“Indeed, the risk was always that a good portion of the benefit would be capitalised in the price, therefore limiting the benefit for the first-time buyer.

“Meanwhile, the latest RICS data continues to highlight the importance of disaggregating the headline numbers when talking about the market.

“Challenges over affordability may have grown across the UK but they are clearly having a bigger impact in some parts of the country than others.

“This is clearly evident in the sales expectations figures which still remain in positive territory in more than half of the areas surveyed in the report.”

Nationally, the majority of respondents (66%) anticipated the change having little consequence, whilst 12% felt it would result in higher overall activity.

Some 28% expect the changes to increase overall market activity. The results for the wider South East are closer to the national picture.

Agreed transactions also fell at the national level, with 13% more respondents reporting a decline in volumes over the month.

Scotland, Northern Ireland and the North East region were the only areas to suggest stronger transactions, whereas sales trends were either flat or negative across the rest of the UK.

Thomas van Straubenzee, managing director at prime London real estate agency VanHan, said: “There has been a steady level of activity in the PCL market recently, with several large deals completing over the last few months.

“There are a number of big buyers in London, which is a good indication of the strength of the market.

“These include Indian, Chinese, Russian and American families, who are looking to take advantage of the favourable exchange rate.”

“We believe there are some excellent investment opportunities in prime central London at the moment. When there have been dips in the market previously, buyers have been, for the most part, rewarded in the long term and so we expect to see a renewed focus on long-term investment.”

Sales expectations nationally remain flat over the coming three months, but respondents are more optimistic over the year to come with activity anticipated to pick-up across all regions/countries over the next 12 months. London recorded its first positive reading since last June.

New instructions continued to decline nationally, extending a run of 23 months.

Looking at prices, 8% more saw them rise in December.

In the lettings market, tenant demand continued to fall during December, albeit the pace of decline eased somewhat from the month before.

Meanwhile new landlord instructions declined at a slightly faster rate. As a result, rental growth expectations were modestly positive for the three months ahead (9% more were positive).

Van Straubenzee added: “We have always maintained that London has long been attractive to both domestic and foreign investors and we strongly believe this will continue to be the case.”

“The PCL market hasn’t had the smoothest ride over the last few years, predominantly due to tax increases, the EU referendum, changes to non-dom property rules (Inheritance Tax, for example), and more stringent regulations in the owner-occupier and buy-to-let mortgage markets.

“We expect that the market will continue at similar levels for the next couple of years, although, that said, we are optimistic that the very best stock will continue to attract strong interest, particularly from foreign buyers.”

“We noticed an upswing in the number of clients wishing to sell their properties off-market last year and this looks set to continue in 2018. Sellers of prime residential property don’t want to enter a crowded market, nor do they want a pricing record in the public domain.”

Article originally posted by Mortgage Introducer