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10 Mar 2021 | 08:37

UK housing market holds steady despite lockdown - RICS

(Sharecast News) - The UK housing market strengthened in February, research published on Thursday showed, ahead of the chancellor's decision to extend the stamp duty holiday. According to the latest RICS UK Residential Survey, the net balance for house price growth was +52% in February compared to +49% in January. Newly agreed sales improved to +1%, against January's net balance of -17%.

The net balance for new buyer enquiries was -9% at the national level, the second consecutive negative monthly figure. However, it was a significant improvement on January's reading of -29%. New instructions strengthened from -40% in to -29%.

The outlook also improved, with the Royal Institution of Chartered Surveyors noting: "Current lockdown restrictions appear to be deterring new vendors putting their homes up for sale. However, forward-looking metrics have shown some improvement, with sales expected to rise modestly over the coming three months.

"What's more, it's important to note that over three-quarters of the survey sample was gathered prior to the chancellor confirming that the stamp duty holiday would be extended until the end of June, and then tapered through to October, in the recent Budget."

Twelve-month price expectations also picked up, with the UK-wide net balance coming in at +46%, compared to +30% in last month's survey.

The UK housing market has boomed recently, fuelled by a rise in the stamp duty threshold and pent-up demand following the first national lockdown, when estate agents and construction sites were forced to close.

The market was widely expected to soften ahead of government schemes such as the stamp duty holiday and furlough ending this spring. But last week Rishi Sunak extended both schemes, with the latter now due to end in September.

Simon Rubinsohn, RICS chief economist, said: "The measures should help support the housing market over the coming months, with concerns around a cliff edge end to the stamp duty break eased.

"However, a very clear message emanating from the latest survey is that more needs to be done to address the shortfall in supply, with price and rent expectations very evidently continuing to accelerate. Planning reform, which the government is addressing, alongside supporting a sustainable and inclusive recovery in the economy are key elements in encouraging the private sector to increase the pipeline of new build."
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