The Government’s decision to abolish stamp duty for most first-time buyers has failed to breathe new life into a struggling housing market.
Almost nine out of 10 (86 per cent) of surveyors said there had been no increased demand from first time buyers in December following these changes, according to the latest monthly survey from the Royal Institute of Chartered Surveyors.
In the Autumn Budget the Chancellor abolished stamp duty for first time buyers purchasing a property worth up to £300,000, with buyers paying a reduced rate on properties priced up to £500,000.
RICS said that the lack of demand from first time buyers could be in part due to seasonal housing market flux.
But its survey revealed that two-thirds of surveyors (66 per cent) did not expect these changes to make a significant difference to buyer demand in the months ahead.
Just 12 per cent of surveyors said they thought it would result in higher overall activity. However, there was more optimism in the capital with 28 per cent of London-based surveyors expecting the stamp duty changes to boost demand.
RICS chief economist Simon Rubinsohn says: “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 material impact on activity.”
He adds that these Budget changes may perversely benefit homeowners looking to sell, rather than first time buyers. “The risk was always that a good portion of the benefit would be capitalised in the price, therefore limit the benefit for the first-time buyer.”
Property investment platform Bricklane founder Simon Heawood adds: “Abolishing stamp duty was a drop in the ocean given the affordability challenge of getting Generation Rent onto the property ladder.”
Elsewhere, this UK Residential Market survey showed a continued lack of momentum in the housing market in December, with buyer interest edging lower.
Across the UK the number of housing transactions fell, with 13 per cent more surveyors reporting a decline in volumes over the month. However, this masked some regional variations with Scotland, Northern Ireland and the North East of England reporting stronger transactions over the month.
Sales expectations remain flat over the coming three months, but surveyors were more optimistic for the year ahead, with sales activity anticipated to pick up across all regions of the UK within the next 12 months.
Rubinsohn adds: “This latest RICS data continues to highlight the important of disaggregation the headlines umber when talking about the market.
“Challenges over affordability may have grown across the UK but they are clearly having a bigger impact in some parts of the country than other. 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.”