Estate agents ‘fear market correction after stamp duty rise’
Industry poll reveals that many are concerned that sales which miss the deadline will fall through and both demand and prices will fall.
Nearly half of estate agents believe the property market will see a drop in transactions after the 31st March Stamp Duty deadline and a similar proportion are worried that house prices could take a dip reports GetAgent.co.uk’s boss Colby Short (main image).
A survey by the agent comparison company found that the stamp duty deadline is a key motivator for buyers, with 47% of agents reporting a heightened sense of urgency amongst buyers as they try to complete before 1st April this year.
However, while buyers are keen to bag a Stamp Duty saving, just 15% of agents reported seeing them offer above the asking price in order to secure a property more quickly.
As a result, nearly half of the agents surveyed expect to see high levels of market activity during the first three months of this year compared to the usual seasonal trends.
Time runs out
However, when the clock expires on current Stamp Duty thresholds, many agents are concerned a market correction is on the cards.
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.
And half believe the market will see a drop in transaction levels in the months that follow, with 45% also concerned that house prices could also take a dip.
“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,” says Short.
A correction is certainly not a crash.”
“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.”