Business

Home sales expected to rise, says Rics

For sale sign
Image caption The housing market has shown some signs of life this year, surveyors say

Surveyors expect sales of homes in England and Wales to rise in the final weeks of a stamp duty holiday.

Sales expectations for the next three months were at their highest level since May 2010, the Royal Institution of Chartered Surveyors' (Rics) said.

The 1% stamp duty rate for first-time buyers, on properties worth between £125,000 and £250,000, is being reintroduced on 24 March.

Surveyors said that the mild winter had also helped activity.

Fewer surveyors than before expect prices to fall in the coming months, although more still expect prices to fall than to increase.

'Improved tone'

Chancellor George Osborne took the decision to reintroduce the stamp duty rate in last November's Autumn Statement, pointing out that the policy - introduced in March 2010 by the previous Labour government - had not helped many more people buy a home.

On Monday, the Council of Mortgage Lenders (CML) said that a pick-up in first-time buyer numbers at the end of 2011 could be the result of people trying to get on the property ladder before the concession expired.

And now the Rics survey has suggested that the "improved tone" among surveyors about activity in the market and price expectations could be at least partially due to the same reason.

"With first-time buyers no longer exempt from stamp duty as of the end of March, it seems that some are looking to purchase homes before the deadline and, as a result, surveyors are relatively optimistic for the coming months," said Michael Newey, Rics' housing spokesman.

He pointed out that first-time buyers still faced difficulties securing a mortgage.

Following the end of March, the end of the stamp duty concession could partially unwind this extra activity of the coming weeks, the Rics report suggested.

Prices

The government's own house price survey - compiled by the Department for Communities and Local Government (DCLG) - confirms that UK house prices stagnated last year.

It says they rose by 0.1% in 2011 to take the average house price to £205,269, leaving them 5% below the peak recorded in April 2008.

The trend in prices was far from uniform. Values fell by 1.6% in Wales, 4.6% in Scotland and 8.1% in Northern Ireland.

But in England they rose by 0.5%, with London prices rising the most - up by 4.4%.

Other recent surveys have shown a similar picture for last year.

  • The Nationwide said prices rose by 1% in 2011.
  • The Halifax said they fell by 1.3%.
  • The Land Registry said prices fell by 1.3% in 2011 in England and Wales.

'Surprisingly brisk'

The Rics survey said the weather was a significant factor in the recent pick-up in activity which had been noted, primarily, by surveyors in the north of England.

Before the cold snap in February, the winter had been mild, and that had encouraged more people than a year earlier to go house-hunting, some said.

"It has been a reasonably busy start to the year. The kind weather has meant that viewers can travel some distance," said surveyor Francis Brown, of Richmond, North Yorkshire.

Edward Waterson, a surveyor in York, said: "There has been a surprisingly brisk start to the year, despite the economy.

"Buyers have appeared to get the bit between their teeth and a shortage of stock is forcing them to make decisions and stick to them."

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