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Stamp Duty tax break MUST happen, surveyors tell government

A large majority of property professionals polled by the Royal Institution of Chartered Surveyors say a stamp duty holiday would be an effective way of kick-starting the housing market.

Stamp Duty tax break MUST happen, surveyors tell government

A large majority of property professionals polled by the Royal Institution of Chartered Surveyors say a stamp duty holiday would be an effective way of kick-starting the housing market.

RICS has welcomed the re-opening of agents’, conveyancers, surveyors and removal company offices but it warning that the government must do more to bolster demand and house building.

Some 62 per cent of those responding suggest a stamp duty holiday would help the market recover post-pandemic, by lifting sales and leaving prices relatively unchanged.

On average, respondents anticipate sales would rebound to their previous levels in around nine months.

In its monthly snapshot of housing market activity for April, RICS says that – unsurprisingly – a net balance of 93 per cent of respondents reported a decline in new buyer enquiries over the course of the month, dipping further from a net balance of 76 per cent in March.

New instructions also continued to fall, with 96 per cent of contributors reporting a drop rather than rise in new properties being listed for sale. This is the weakest net balance reading since the inception of the RICS measurement in 1999.

As far as prices are concerned, following a run of three successive months of positive readings, the RICS headline house price balance fell into negative territory with a net balance of 21 per cent noting a decline in prices.

Some 35 per cent of the survey participants believe that when the market reopens, prices could be left up to four per cent while around four in 10 take the view that prices could in fact fall by more.

They suggest that a recovery in prices could take a little while longer than sales levels, with respondents suggesting, on average, prices will recover in 11 months.

“Not surprisingly, the latest survey shows that housing activity indicators collapsed in April reflecting the impact of the lockdown. Looking further out, there is a little more optimism but the numbers still suggest that it will be a struggle to get confidence back to where it was as recently as February. Moreover, whether this can be realised will largely depend on how the pandemic pans out and what this means for the macroeconomic environment” explains Simon Rubinsohn, RICS’ chief economist.

“There are, of course, other options available to government as they reopen the market, notwithstanding stamp duty options such as reducing or removing stamp duty for downsizers that would kickstart market fluidity, and we look forward to continuing conversations as the market starts to move again.”