Sunshine helps boost housing market
The unusually warm weather and a rush of first-time buyers trying to beat a stamp duty deadline gave the housing market a boost last month, a report has said.
New buyer inquiries edged up in March, with 9% more estate agents reporting increases rather than decreases in demand, the highest reading in almost two years, the Royal Institution of Chartered Surveyors (RICS) said.
A balance of 10% of surveyors reported falling prices in March, the least negative reading since June 2010, as prices continued to edge downwards in all regions except London.
The market saw an upturn in activity as the March 24 deadline for the end of the stamp-duty free period for first-time buyers on properties worth under £250,000 approached. The report said: "Another factor that appears to have had a positive impact during March is the weather. Indeed, March was 'warmer' than normal."
The study said that this could mean the findings gave a more robust impression than the underlying trend, although it said there was "growing evidence" of a more fundamental improvement, with surveyors becoming more optimistic. Expectations for future sales remain positive, with a balance of 20% of surveyors expecting sales to increase over the coming three months.
RICS chief economist Simon Rubinsohn said: "Demand saw a slight boost in March as many first-time buyers looked to beat the stamp duty holiday deadline. There has been a gentle increase in activity across the market in the early part of the year but it remains to be seen whether this can continue, given the changes in the Budget and ongoing problems affecting the economy."
Estate agents have criticised the Government's decision to impose a 7% stamp duty rate on £2 million properties, saying it will affect sellers and buyers all the way down property chains. Predictions for future prices across the UK remained flat for the second consecutive month, suggesting that gently increasing levels of demand may be the key factor behind the more optimistic outlook.
The North, East Anglia and Scotland saw buyer interest drop, while surveyors elsewhere reported a steady increase. But the North West saw a "notable" upturn in activity, with buyer interest reaching its highest level since the end of 2009.
The level of new properties coming onto the market generally remained "stable" with a balance of 2% more respondents reporting a rise in instructions.
The main findings for the study, which questions chartered surveyors working in the residential sales market, cover England and Wales, but some information covering Scotland and Northern Ireland is also collected.