The recent surge in housing market activity spurred by the government’s decision not to extend current stamp duty relief will run out of steam after the 1 April deadline, resulting in a market correction in the form of a reduction in transaction volumes and cooling house prices.
That’s according to a survey of estate agents across England, commissioned by GetAgent.co.uk.
The survey found that since the Autumn Budget, when the government announced it would not be extending current stamp duty relief thresholds, agents have noted an increased level of buyer enquiries being made and offers submitted.
The impending SDLT deadline is clearly a motivator for buyers in the current market, with 47% of agents seeing a heightened sense of urgency amongst buyers with respect to completing before 1st April this year.
However, whilst buyers are clearly keen to bag a SDLT saving, just 15% of agents reported seeing them offer above the odds with respect to asking price, in order to secure a property at a quicker pace.
Some 47% of agents surveyed expect to see a higher level of market activity continue to take place during the first three months of this year compared to the usual seasonal trends generally observed across the market.
However, when the clock does expire on current stamp duty thresholds, many agents are concerned a market correction is on the cards following this period of heightened activity.
Also, 38% said they are concerned that they will see an increase in fall through rates amongst those buyers who fail to complete before the deadline.
Almost half – 47% – believe the market will see a drop in transaction levels in the months that follow the 31st March deadline, with 45% also concerned that house prices could also take a dip.
The co-founder and CEO of GetAgent.co.uk, Colby Short, commented: “The government’s decision not to extend current stamp duty relief thresholds has certainly spurred an increase in buyer activity, with those who may have previously been on the fence now eager to complete before 1st April to secure a saving.
“The good news is that only a small proportion of these buyers are offering above the odds to secure a property in time, which should prevent the market from overheating to the same extent we’ve seen following previous stamp duty deadlines.
“However, a heightened level of buyer activity will inevitably drive both transaction volumes and house prices upwards, leaving many agents reasonably concerned about a potential market correction once the deadline passes.
“Of course, a correction is certainly not a crash and so whilst we may see a momentary dip in activity during the second quarter of this year, we expect the market landscape to steady and for any correction seen to be short lived.”
Read the orginal article: https://propertyindustryeye.com/agents-forecast-of-property-market-correction-following-stamp-duty-deadline/
