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House prices seen falling in early 2018 after December pickup - RICS
Surveyors reported a pick-up in house prices last month, though changes to stamp duties for first-time buyers had little to no immediate effect, according to a report released on Thursday.
Research from the Royal Institution for Chartered Surveyors found the balance of surveyors reporting that house prices have risen over the last three months increased to +8% in December from zero in November, well above the consensus forecast for a fall of 1%.
Most surveyors said they had seen no increase in first time buyer enquiries since Chancellor Philip Hammond's decision to reduce stamp duty for first-time buyers in the November Budget, with new buyer demand even falling to a balance -15% in December from -5% a month earlier.
So, while December may have picked up, prices are expected to fall over the next three months, with RICS saying this indicated "a lack of conviction" surrounding the near-term outlook, though sale instructions were falling less sharply than demand and stocks of unsold homes edging up since the summer's low.
Agreed transactions fell 13% over the period and while sales were generally flat or in the red across the UK, Scotland, Northern Ireland and the North East region all suggested stronger transactions.
New supply instructions also continued their nationwide decline with respondents continuing to emphasise the adverse impact this is having on the market.
Simon Rubinsohn, RICS chief economist, said "The initial feedback from the market doesn't suggest that the change in the Stamp Duty regime announced in the budget is going to have a material impact on activity. Indeed, the risk was always that a good portion of the benefit would be capitalised in the price, therefore limiting the benefit for the first-time buyer."
"Meanwhile, the latest RICS data continues to highlight the importance of disaggregating the headlines numbers when talking about the market. Challenges over affordability may have grown across the UK but they are clearly having a bigger impact in some parts of the country than others. This is clearly evident in the sales expectations figures which still remain in positive territory in more than half of the areas surveyed in the report," he added.
The chancellor's policy abolished the stamp duty on homes under £300,000 for first-time buyers, saying it would help a million people get on the housing ladder.
"Hopefully, by abolishing stamp duty, which will save the average first-time buyer about £1,700, that will be a help and an incentive to focus on getting the deposit together, getting the money together to get on the housing ladder, and we hope that many more young people will be able to get on the housing ladder," Hammond said in November.