UK Chancellor Rishi Sunak’s extension to the stamp duty deadline for property purchases has bolstered a boom in housing market activity, says the results of a survey published on Thursday.
The Royal Institution of Chartered Surveyors’ monthly gauge of house prices – centred around surveyor reports throughout the UK – increased last month to +59 from February’s reading of +52.
Other indications of the UK’s housing market suggested activity was dwindling ahead of the stamp duty holiday deadline at the end of March, Reuters reports.
However, the Chancellor prolonged the tax break in the March Budget and unveiled a mortgage guarantee scheme for first-time buyers who are unable to put down large deposits.
RICS chief economist, Simon Rubinsohn commented: “The results from the latest RICS survey show that the decision of the Chancellor to extend the stamp duty break and then taper its expiry has had an immediate impact on the housing market with all the key activity indicators rebounding in March.”
Rubinsohn added a deteriorating imbalance between supply and demand has also increased pressure on house prices. Around 60% of respondents to the survey forecast increasing prices over the coming year.
RICS also stated there were signs that demand within Britain’s rental market was creating a “head of steam”. Surveyors predict rent to increase over the next 12 months throughout the UK, apart from in the capital.
The Chancellor introduced the stamp duty holiday in 2020 within a raft of emergency measures to counter the impact of the coronavirus crisis.
Demand for larger homes following lockdowns has also led to soaring activity in the UK housing market since last spring, Reuters reports.