House sales pick up thanks to stamp duty holiday

Extension of scheme leads to strongest sales since last August, writes Vicky Shaw of PA

House sales picked up sharply in March amid signs that the extension of a stamp duty holiday had an immediate impact on the housing market, according to surveyors.

A net balance of 50% of propertyprofessionalsreported an increase rather than a decrease in agreed sales, the Royal Institution of Chartered Surveyors (Rics) said.

It marked the strongest sales surge since last August.

A stamp duty holiday had beenduetoendonMarch31,but this was extended in the recent Budget.

Thestampduty“nilrate”band will now not revert to normal levels until the autumn.

The current stamp duty threshold under the holiday is £500,000.

Thiswillfallto£250,000from July 1, and from October 1 it will falltoitsusualfigureof£125,000.

The pick-up galvanised expectations that sales activity will increase over the next three months, with a balance of 35% of surveyors predicting an uptick.Thiswasthemostupbeat reading on this measure since January 2020.

Rics said that with demand forhomescontinuingtooutstrip supply, house prices increased, with a net balance of 59% of surveyors seeing an increase since February’s survey was published.

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.

An overall balance of 60% of surveyors expect prices to be higher rather than lower in 12 months’ time.

There were indications that the supply of properties coming on the market could increase in the coming months, with a net balance of 29% of surveyors reporting an increase rather than a decrease in appraisals.

Looking at the rental market, tenant demand increased while newinstructionsfromlandlords decreased.

Professionals generally felt this would place an upward pressure on rents.

London was the only part of the UK where rents were not expected to rise.

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, withallthekeyactivityindictors rebounding in March.

“However, the headline numbersaswellastheanecdotal remarks from respondents clearly demonstrate that across much of the market, demand is outstripping supply and that as aresult,pricescontinuetomove upwards. More worryingly, this is also being reflected in the price expectations data both at the 12 months horizon and beyond.