End of stamp duty holiday encourages East of England buyers

House sales in the East of England edged up 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, out today (February 14).

Thirty-three 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 spite of this relative optimism, prices across the region continued to drop, albeit moderately, with 25% more surveyors reporting price falls rather than rises.

Supply in the East of England dipped during January, with 24% more surveyors reporting decreases rather than increases in new homes coming onto the market.

Alongside this, overall new buyer demand dipped in the first month of the year, demonstrating that the recent lift in activity has been driven by one-off factors. 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 21% more surveyors expect prices to continue falling over the coming three months.

Michael Newey, RICS housing spokesman, said: “Prices are still falling across the region, but expectations for future prices have become less pessimistic.”