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Summer housing boom may not last, warn surveyors

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Written by: Shekina Tuahene
13/08/2020
New buyer enquiries are up as a result of the Stamp Duty freeze, but demand is expected to tail off
Summer housing boom may not last, warn surveyors

Housing market activity picked up in July as the stamp duty cut boosted demand but surveyors are uncertain how long the summer boom will last.

The stamp duty holiday played a significant role in lifting homebuyer demand, according to the Royal Institution of Chartered Surveyors (RICS) July market report.

Surveyor responses are measured on a net balance of 100% to –100% depending on whether respondents report increases or decreases.

New buyer enquiries were up on the previous month, rising from a net balance of 61 in June to 75 in July.

Agreed sales also increased from 43 in June to a net balance of 57 in July.

Meanwhile 57% of surveyors said they had seen growth in new valuation instructions, up from 41% in June.

An increase in house prices was reported by 12% of respondents during July, a notable change from June’s -13%.

Over the next 12 months, 8% of respondents expect prices to rise.

Despite the strength of the summer market, RICS said some surveyors had suggested the housing market would experience a “boom followed by a bust”.

Some 26% of valuers said they expected a growth in sales over the next three months, however, –10% predict sales “tailing off” over the next year once the furlough scheme ends in October and the stamp duty holiday expires in March.

Simon Rubinsohn, chief economist at RICS, said: “The strong impetus provided to the housing market is evident both in the results of the RICS survey and many of the anecdotal comments from respondents.

“However, it is interesting that there remains rather more caution about the medium-term outlook with the macro environment, job losses and the ending or tapering of government support measures for the sector expected to take their toll.”

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