Stamp duty reforms yet to be felt in UK property market

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/51df649a-9bda-11e4-b6cc-00144feabdc0.html#ixzz3QaH6xUSN

Stamp duty reforms are yet to have a noticeable effect on UK housing activity despite widespread predictions they would deliver a fillip to the slowing market.
All of the key price indices have slowed in recent months and the number of mortgages approvals has dropped to a 17-month low.

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/51df649a-9bda-11e4-b6cc-00144feabdc0.html#ixzz3QaHA37pC

When the move to a progressive rather than “slab” tax system was announced on December 3, there was an instant flurry of moves at the top end of the market as wealthy buyers rushed to close deals ahead of the midnight changes. Sales in London’s most expensive areas hit their highest one-day volumes in a decade.

While those buying properties over £937,000 face higher tax bills, most purchases will see costs slashed, which economists expect to boost the number of transactions.
However, there is no hard evidence of a wider immediate impact in the first set of survey data covering the new era.

Royal Institution of Chartered Surveyors (RICS) data show the number of new buyer inquiries across the whole of the UK fell for the sixth consecutive month in December.
Outside London, surveyors still expect the changes to boost transactions over the coming year, with the majority expecting a 2 to 5 per cent increase.
At the higher end of the market, particularly for larger properties in London, surveyors expect sales to drop by 5 to 10 per cent and prices to fall by 2 to 5 per cent.

Simon Rubinsohn, chief economist at RICS, said he still expected the changes would boost activity in the medium term, noting that as the reforms were permanent there was “no urgency” for most people to take immediate advantage.
Other factors such as more stringent lending criteria and the forthcoming general election were still likely to weigh on the market in the meantime, he added.