The Royal Institute of Chartered Surveyors says the previously expected increase in house sales for the coming months will be dampened by the recent rush caused by Stamp Duty reforms.
According to the monthly residential market survey conducted by RICS over March suggests the SDLT reforms caused planned sales to be brought forward rather than generating additional sales.
The report also states that the lack of supply may well be the dominant feature for some time, although the balance of surveyors expecting prices to rise has dipped slightly – prices have risen continuously for three years now. Surveyors also expect new buyer enquiries to be broadly stable.
The report says: “On the activity front, agreed sales improved for the fourth month in succession although at a much slower rate in comparison to earlier in the year. Looking ahead, near term sales expectations dipped marginally into negative territory for the first time since 2008.
“Even so, survey evidence had strongly suggested sales were being temporarily boosted or brought forward by a flock of buy-to-let investors and second home purchasers looking to complete transactions before the introduction of the aforementioned Stamp Duty change. As such, the more subdued near term sales outlook is unsurprising. Further out, over the next twelve months, sales are still projected to rise across all parts of the country albeit less so than previously.
“Following a run of three successive monthly increases, new sales instructions were broadly flat during March. Furthermore, notwithstanding the marginal uptick over the latest month, average stock levels per surveyor remain nearly 20% down on an annual comparison.
“Alongside this, new buyer enquiries were broadly stable at the national level although this masks considerable regional variation. Indeed, demand fell sharply in London and was broadly flat in the South East, Yorkshire and Scotland. Meanwhile, enquiries grew, to a greater or less degree, across all other parts of the UK.”
Andy Sommerville, Director of Search Acumen, said: “RICS members’ suspicions that activity would slow down as a result of the new buy to let stamp duty surcharge seem to have already been confirmed by the easing of demand in March, with new instructions stalling and short-term sales expectations dipping.
“These changes were always going to fuel demand from prospective landlords and second homeowners, and the slight lull in March suggests that the majority did not leave completion until the very last moment. Conveyancers were still exceptionally busy in March however, with many under pressure to deliver for those clients looking to make it over the line ahead of the changes coming into effect.
“The impending lull in activity in April should come as no surprise to conveyancers, many of whom have been preparing for this dip in activity for some time now. However the bigger picture suggests this will only be temporary – buy to let property remains a very attractive investment, and the cost of the extra stamp duty is far outweighed by rental yields and long-term capital growth. The demand for homes continues to significantly exceed supply, and there is no sign of that changing any time soon.”