Housing market horizons end with stamp duty concession

Permalink: Housing market horizons end with stamp duty concession
by Gill Montia

In a new report, the Bank of England notes a “modest” increase in housing market activity since the start of the year, beyond what was expected.

However, according to the Bank’s agent contacts, the market has been catching-up from a particularly subdued late 2011 while being bolstered by the ending of the stamp duty concession, scheduled for March.

In addition, activity from buy-to-let investors has strengthened on the back of increased demand in the private rental sector, particularly from would-be first-time buyers, many of whom remain unable to secure a mortgage.

With regard to existing homeowners, agents told the Bank that some are unable to move because they have insufficient equity in their homes, while others are cautious about trading up because of concerns about the economy.

Also this week, the National Association of Estate Agents (NAEA) reported that 23% of overall sales were to first-time buyers in January, compared with 21% in December.

However, next month, stamp duty reverts to 1% on purchases of £125,000 and over (current threshold £250,000) and NAEA president, Wendy Evans-Scott, comments: “We are deeply disappointed that ministers have axed this support for a crucial part of the housing market which has benefited so many house-hunters in getting onto the property ladder.”

The Association’s figures also show the number of house hunters registered falling to an average 260 per branch in January, compared with 294 in December.

Sales increased slightly across the property market in January, with an average of six per branch, compared with five in December.

On the supply side, levels dipped to their lowest in 19 months with an average of just 60 properties per branch available to house-hunters.