Another call for Government to abolish Stamp Duty

There has been yet another call for the Government to cut stamp duty, in order to stimulate the property market.

The latest plea comes from independent estate agent Haart, as part of their latest market monitor.

Price falls

According to the figures, house prices fell slightly in September (1.1%) to drop down annual house value growth to 2.7%. As such, the average UK price growth now stands at £226,229.

Demand for homes from new buyers has increased by 1.5% since August, but is still down year-on-year by as much as 22.4% across the UK. What’s more, the number of properties coming onto the market has dropped by 2.8% month-on-month and by 2.3% over the year.

Due to this decrease in stock, the number of purchasers chasing instructions has upped slightly. There are now 10 buyers for every new property that comes onto the market in Britain.

Efficiency

The property market has also become less efficient over the month, with the number of transactions decreasing but the number of viewings going up. This indicates that buyers are choosing to look at more properties before they eventually buy.

Average purchase prices for first-time buyers rose during September by 1.7% but are still down year-on-year, currently sitting at £165,092. The number of first-time buyers entering the market is also down, by 12.6% month-on-month and 32.1% year-on-year.

Capital Pains

In London, the average property price has slipped marginally, by 0.7% over the month. However, it is up by 2.4% in the year. This said, it is less than the annual growth seen across the UK.

Demand in the capital rose by 3.8% in September, but is still down by a substantial 38.5% at the same stage in 2015. Additionally, the number of properties for sale fell by 4.8% monthly and by 8.9% over 12 months. Sales are also down, by 1.9% monthly and 24.4% annually.

Average rents in London fell by 1.8% in September to sit at £1,895.

Returns

However, landlords are slowly returning to the market, after initially retreating due to the Stamp Duty rise introduced in April. During September, landlords registering an interest in buy-to-let increased by 9.2% across Britain.

Despite this, the number of overall sales transactions in the UK was down by 13.7% this month. London however saw a monthly increase of 20.8%.

Paul Smith, CEO of haart, stated: ‘Although we are seeing more positive consumer confidence materialising post-Brexit, the UK’s housing market is still marked by a number of negatives, as prices and transactions continue to fall on the month. We are however starting to see some improvements, in the form of the number of new buyers that are entering the market and the number of viewings that are taking place.’[1]

Actions

Mr Smith believes that: ‘Action needs to be taken to reverse the sluggish pace of activity, to turn these initial engagements with the property market into transactions. A greater injection of confidence and stability is also important for housebuilders, in order to reassure them they will get good margins on the potential sale price of new homes if they start building again, particularly crucial in order to reach the ambitious housebuilding targets that Sajid Javid has set.’[1]

‘This month’s monitor shows landlords are starting to return to the market despite the extra 3% hike in Stamp Duty imposed by George Osborne. This is a positive that needs to be encouraged, especially considering the Royal Institution of Chartered Surveyors suggests 1.8m more households will be looking to rent by 2025 and yet 85% of landlords have no plans to increase their portfolios,’ he continued.[1]

Concluding, Smith said that, ‘Surely it is time the new Government overturns the negative Stamp Duty hikes both aimed at buy-to-let investors and at the top end of the scale. Measures need eased in order to increase fluidity within the market as these charges are without as these charges are without doubt causing a log-jam-no wonder when buyers have to fork out and extra 3% on top of the 7% they are already paying.’[1]

[1] http://www.propertyreporter.co.uk/property/calls-for-the-government-to-dr0p-stamp-duty.html