House prices struggle despite duty incentive

 
Tim Wallace
Follow Tim
HOUSE prices fell again in March, despite higher buying activity ahead of the expiry of the stamp duty holiday, industry figures showed today.

Ten per cent more surveyors reported prices falling than rising in the three months to March, according to the Royal Institution of Chartered Surveyors’ (RICS) survey. The fall represents a slowdown from the net balance of 13 per cent reporting falls in the February survey, and is the strongest reading since June 2010. New buyer enquiries edged up, with nine per cent more surveyors reporting increases rather than decreases in demand – the highest level in almost two years, suggesting the final weeks of the stamp duty holiday for first time buyers saw more seeking to beat the deadline. Yet the only region with rising prices was London, where a net balance of 58 per cent of surveyors saw prices rise.

“There has been a gentle increase in activity across the market in the early part of the year but it remains to be seen is whether this can continue, given the changes in the Budget and ongoing problems affecting the economy,” said RICS’ Simon Rubinsohn.

Meanwhile a Lloyds study of the housing market across 2011 showed the lowest number of sales since 2008.

Only 40 per cent of towns saw an increase in activity in the year – overall sales fell four per cent to 630,389.

“The overall level of housing market activity across England and Wales has weakened over the past year, reflecting the concerns over the outlook for the UK economy,” said Lloyds’ Sureb Thiru. “Additionally, consumers are experiencing difficulties in raising the necessary deposit, which is preventing many potential home buyers from entering the market.”