House hunter inquiries fall as stamp duty holiday tapered

The volume of house hunter inquiries has started shrinking after a reduction in the amount of stamp duty savings to be made, surveyors have reported.

An overall net balance of 9% of property professionals reported new buyer inquiries falling rather than rising in July, the Royal Institution of Chartered Surveyors (Rics) said.

This brought to an end a four-month “positive streak” for the UK market on this measure.

In June, a balance of 10% of surveyors reported buyer inquiries increasing rather than decreasing.

A stamp duty holiday in England and Northern Ireland has been tapered from July and the “nil rate” band will revert to normal levels from October.

This means many buyers agreeing deals now are likely to miss out on stamp duty savings.

Sales volumes have slowed most notably in Yorkshire and the Humber, the East Midlands and East Anglia, the report said.

However, a lack of housing supply is still underpinning price growth, Rics added.

A net balance of 46% of professionals saw a fall in new listings in July, marking the weakest reading for new instructions since the early days of the coronavirus lockdown in April 2020.

Growth in prices was noted across the UK, with the North of England, Wales and East Anglia recording particularly strong growth and London seeing more moderate feedback.

A net balance of 66% of professionals predict that house prices will be higher in a year, up from 56% in June.

Demand from tenants looking to rent new homes remained strong in July, Rics said.

With new instructions from landlords remaining in decline, rents are expected to rise over the next three months.

Rental expectations in London have seen a particular turnaround, with a net balance of 47% of professionals expecting rents to increase.

Simon Rubinsohn, Rics chief economist, said: “Although the tapering in stamp duty is beginning to have some impact on Rics activity indicators, the overall tone to the market remains firm with the metrics capturing price expectations showing few signs of wavering.

“Significantly, a strong message from survey respondents is that buyers are continuing to place a premium on space, with the prospect of a hybrid model of work being adopted by many organisations, providing the opportunity for greater flexibility around location.”