Thursday 10 September 2020 12:01 am

London house prices stabilise as buyers take advantage of stamp duty holiday

London’s housing market has stabilised with activity continuing to rise, as buyers take advantage of the stamp duty holiday.

The August Rics residential survey found 28 per cent of respondents noted an increase in buyer interest across the capital.

Buyer enquiries continued to rise while the number of new properties listed for sale also increased.

Read more: Exclusive: Merton leads London house prices higher as buyers seek space

This led to the third successive month of strong growth in agreed sales, with a net balance of 25 per cent of contributors seeing a pick-up.

The government suspended stamp duty on the first £500,000 of all property sales in England and Northern Ireland in a bid to boost house prices.

The pandemic has triggered a shift in the desirability of certain property characteristics. The survey found 83 per cent of respondents anticipate demand increasing for homes with gardens over the next two years. While 79 per cent predict rising demand for those properties near green space.

While near term sales expectations for London have stabilised, the longer-term view remains more cautious. Rics said concerns over the broader economic climate were driving this more subdued assessment.

There has also been a pick-up in the lettings market, as tenant demand has started to rise in the capital. Rental growth expectations over the near term have weakened further in August, with a net balance of minus 41 per cent of contributors now anticipating a fall.

Read more: UK house prices hit record high as stamp duty cut powers market

Simon Rubinsohn, Rics Chief Economist commented: “The latest RICS survey provides firm evidence of a strong uplift in activity in the housing market which should help support the wider economy gain traction over the coming months. More of a concern is the pick-up in prices which could intensify issues around affordability in some parts of the country. Disaggregated data shows demand generally to run ahead of supply.”

“Meanwhile the results provide a further pointer to more substantive changes taking place in household behaviour in the wake of the pandemic. Increased demand for properties with garden and near green spaces has if anything increased since we tested the water in May.”