Stamp Duty  

Stamp duty changes have limited impact on market

Stamp duty changes have limited impact on market

The changes in stamp duty introduced in November's Budget have had a limited impact on the housing market, according to the Royal Institution of Chartered Surveyors (Rics).

First-time buyers were also given a boost when chancellor Philip Hammond scrapped stamp duty for the majority of them in the Autumn Budget.

But despite this, Rics has said the UK housing market has continued to display a "lack of momentum" towards the end of last year, with buyer interest edging lower.

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Responses to the Rics UK residential market survey showed 86 per cent of respondents across the UK said they had not seen any changes in the level of first-time buyer enquiries since the Budget.

Nationally, the majority of respondents - 66 per cent - anticipated the change having little consequence, while 12 per cent felt it would result in greater overall activity.

Simon Rubinsohn, chief economist at Rics, said: "The initial feedback from the market doesn’t suggest that the change in the stamp duty regime announced in the Budget is going to have a material impact on activity.

"Indeed, the risk was always that a good portion of the benefit would be capitalised in the price, therefore limiting the benefit for the first-time buyer."

But analysis of the decision to scrap stamp duty predicted the move would increase house prices because sellers would demand more money knowing first-time buyers do not have to pay stamp duty.

Agreed transactions also fell at the national level with 13 per cent more respondents reporting a decline in volumes over the month.

Scotland, Northern Ireland and the north east region were the only areas to see stronger transactions, while sales trends were either flat or negative across the rest of the UK.

New instructions continued to decline nationally, extending a run of 23 months.

Sales expectations nationally remain flat over the coming three months, but respondents were more optimistic over the year ahead with activity anticipated to pick-up across all parts of the UK over the next twelve months.

Mr Rubinsohn said: "Challenges over affordability may have grown across the UK but they are clearly having a bigger impact in some parts of the country than others.

"This is clearly evident in the sales expectations figures which still remain in positive territory in more than half of the areas surveyed in the report."

damian.fantato@ft.com