Housing market taking ‘breather’ as stamp duty holiday ends, say estate agents

The flow of new homes being put on the market continued to fall in August, pushing the number of properties on estate agents’ books close to record lows.

An overall net balance of 37% of property professionals reported a fall in new property listings, the Royal Institution of Chartered Surveyors (Rics) said.

The choice of properties has been shrinking for eight out of the past nine months.

Stock levels on estate agents’ books fell from an average of 42 homes per branch at the start of 2021 to 38 in August, getting near record lows, Rics added.

New buyer inquiries fell for a second month in a row, with a net balance of 14% of property professionals saying they had seen fewer house hunters.

An overall balance of 18% of professionals also saw a fall rather than an increase in sales being agreed.

With demand outpacing supply, however, professionals continued to report strong rates of house price inflation – with a net balance of 73% saying they had seen prices increase since the previous month’s survey.

Looking forward, professionals are more optimistic about the market’s prospects, with sales over the next three months expected to stabilise before returning to modest growth over the next year.

Sales expectations for the year ahead are most positive across London, Northern Ireland and the South East of England.

A stamp duty holiday in England and Northern Ireland was tapered from July and will end this autumn.

Tarrant Parsons, a Rics economist said: “The latest survey evidence inevitably points to market activity taking a breather following the flurry of sales seen ahead of the tapered stamp duty holiday withdrawal.”

Commenting on the effects of the stamp duty holiday, Bradley Tully, senior public affairs officer at Rics said: “Rics was supportive of the stamp duty holiday as a response to unique market circumstances last year during the height of the pandemic, though the scope of the holiday was arguably broader than we had anticipated and it should have been allowed to expire as originally intended.

“Over the long term, Rics believes that an overhaul of stamp duty land tax should ultimately be delivered.”

He added: “We would urge the Government to undertake a full-scale review of the current stamp duty land tax system to assess future ideal outcomes in terms of factors such as revenue generation and housing market fluidity.

“Housing affordability for first-time buyers and key workers should remain a crucial factor when considering access to the market too.”