The housing market has seen an astonishing rebound following the 1st April Stamp Duty cliff-face, a leading estate agency has reported.

Hamptons says applicant demand increased during May at the fastest rate in four years and that there were 3% more applicants registering to buy a home compared to the same month last year, up from a 10% year-on-year decline after the Stamp Duty rates changed.

And owner-occupiers, including first-time buyers and up-sizers, are leading the rebound.

But estate agency firms are not quite in popping-cork territory yet; Hamptons also recorded a sharp fall in demand from second home purchasers and investors which is in response to recent Stamp Duty and Council Tax changes.

Falling rates

Also, prices have held up as a glut of unsold homes has been offset by falling mortgage rates that have given buyers more purchasing power, the high stock levels mean homes are taking longer to sell.

“The post-Stamp Duty holiday lull has proven to be short-lived, with year-on-year changes in buyer demand returning to positive territory in May,” says Aneisha Beveridge, its Head of Research.

“Falling mortgage rates have significantly boosted buyers’ purchasing power, in most cases offsetting the increase in Stamp Duty bills they now face.

“First-time buyers have been the most significant beneficiaries, with high LTV mortgage rates seeing the most substantial falls, alongside more favourable affordability assessments from lenders.

But Beveridge adds that prime markets remain tentative largely because these typically discretionary sellers are willing to wait for prices to recover and are less prepared to sell ‘at any cost’.