The stamp duty reforms introduced by the chancellor George Osborne are expected to boost house sales by 2-5% says Rics.
According to a recent survey by the Royal Institute of Chartered Surveyors (Rics) the recent dip in house prices in November, the sixth month in a row, could reverse due to the changes in stamp duty.
Changes to the stamp duty by chancellor George Osborne replaced the old slab banding to an incremental tax reducing the cost for first time buyers, home movers and buy-to-let properties.
The biggest savings are for home movers buying an average family home worth £275,000 saving £4,500. This means these buyers can now afford to offer £280,000 without going over budget.
House sales expecting a 5% rise
The Rics survey shows members are expecting a 5% increase in transactions over the next year as a result of the stamp duty changes as supply of property increases.
House price growth has continued to dip and 15% more surveyors have reported a decline rather than a rise in new buyer enquiries with supply falling for the fourth consecutive month.
The survey also said the number of house sales at each branch reduced to 56, the second lowest on record. Rics has suggested uncertainty surrounding next years general election could be a factor.
Data from surveyors suggest the average level of inventory on their books is close to a historic low increasing the likelihood that supply would respond in the future.
Older retired home movers can buy more expensive properties where there is a shortfall with equity release buyers access money using a lifetime mortgage for the extra deposit.
It may be easier for remortgage buyers to stay in their existing home in the short term and avoid the cost of moving including stamp duty tax.
Rics expecting an uplift
It is no surprise to Rics that surveyors are expecting an uplift in the housing market following the chancellor’s reform of the stamp duty tax system.
The chancellor had considered the slab banding of stamp duty as ‘the most damaging tax of all’.
By removing the ‘dead zones’ in the housing market Rics has said the distortions in the market have been removed and properties at the top end of the market pay a fairer share and reducing the cost for first time buyers and family home movers.
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