Stamp duty confusion is hurting house sales

Aug 13 2008 by Alistair Houghton, Liverpool Daily Post

THE Government’s mixed messages on stamp duty could damage any signs of returning confidence in the housing market, surveyors are warning.

The Royal Institution of Chartered Surveyors (RICS) said there were indications of marginally better conditions last month despite estate agents selling an average of just 14.4 properties each during the three months to July, the lowest number of property sales since records began in 1978.

RICS said sellers appeared to have “more realistic” sales expectations, though almost nine out of ten surveyors still said sales had fallen over the three months to July.

In the North West, 91% of surveyors said prices had fallen over the three months to July, compared to 82% in the June survey.

No surveyors reported a rise in prices over the period.

But RICS said speculation over whether ministers might temporarily suspend stamp duty in a bid to revive the housing market is causing more uncertainty among potential buyers.

The possibility of such a move emerged last week, with both the Chancellor Alistair Darling and Housing Minister Caroline Flint refusing to confirm or deny the speculation.

It prompted warnings from estate agents that some buying had stopped while a definite decision was made.

RICS North West spokesman Ian Perry said: “The lack of mortgage finance has brought the housing market to a virtual standstill, with first-time buyers rapidly becoming an endangered species.

“Going forward, there are signs that sales activity might pick up a little as sellers start to re-evaluate unrealistic asking prices.

“However, the current confused messages from the Government regarding stamp duty risks dam- aging any returning confidence and may discourage mobility.”

The latest findings follow a gloomy couple of weeks for the housing market, with both Nationwide and Halifax reporting annual house price falls of more than 8%, the biggest drop since the 1990s house price crash, prompting economists to warn that the market was heading for a sharp correction.

A poll for the National Association of Estate Agents last week reportedly found that 24% of more than 1,000 of its members felt that sales had fallen through as a result of the stamp duty confusion.

TONY McDONOUGH: PAGE 8

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