Hike in demand for homes as stamp duty holiday ends

Date:

Wednesday 11th April 2012

First-time buyer activity increased ahead of March's tax deadline

Homebuyers rushed to beat the end of the stamp duty holiday in March pushing new buyer enquires higher, with 9% more surveyors reporting increases rather than decreases in demand. This is the highest reading in almost two years.

The end of the stamp duty holiday for first-time house buyers means that they will join other homebuyers in paying 1% tax on properties worth between £125,000 and £250,000.

Regional variations were evident with the North, East Anglia and Scotland seeing buyer interest drop, while surveyors elsewhere reported a steady increase.

Significantly, the North West housing market - which has weakened along with much of the country in recent times - saw a notable upturn in activity. Buyer interest reached its highest level since the end of 2009 - net balance +36% - which resulted in an upward shift in price expectations in the region.

Looking ahead, with demand seeing gentle increases across much of the country, expectations for future transaction levels remain positive with a net balance of 20% more surveyors expecting sales to increase over the coming three months.

RICS Chief Economist Simon Rubinsohn said: "Demand saw a slight boost in March as many first-time buyers looked to beat the stamp duty holiday deadline. There has been a gentle increase in activity across the market in the early part of the year but it remains to be seen is whether this can continue, given the changes in the Budget and ongoing problems affecting the economy.

"London continues to outperform the rest of the UK in terms of prices but, interestingly, the North West did see an increase in activity in March."

NewBuy scheme

The stamp duty holiday has now been replaced by the NewBuy Guarantee, which the Government believes will be effective in helping more people gain a first foot on the property ladder.

Under the NewBuy Guarantee, the Government and major housebuilders will guarantee part of the loan from banks to first-time buyers. This is intended to help those with smaller deposits to buy a new home.

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