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Stamp Duty causes a boost in first time buyers.

14 February 2012

House sales are edging up as first time buyers hoped to beat the stamp duty holiday, however house prices are continuing to drop round the country.

Estate agents reported increased sale in January as March 24th looms with the end of the stamp-free period for first time buyers on homes under the £250,000 mark.
Nonetheless, this small boost in buying hasn’t helped to support prices with many estate agents across the UK reporting falls rather than increases.
Michael Newey, Royal institution of chartered surveyors housing spokesman, said: "Many problems with the market still exist and the lack of affordable mortgage finance is still preventing many from getting on to the property ladder."
The largest drop in prices came from Wales, followed closely by the Midlands, Yorkshire and Humberside. However, the highest level of new sales came from the West Midlands and East Anglia. The North West, Yorkshire and Humberside were they only counties reporting a fall in new sales.
This boost of confidence led to a lift in optimism, with surveyors predicting transaction levels to pick up over the upcoming months.
The supply of homes was relatively balanced during January with more and more surveyors reporting an increase with new homes coming onto the market.
Whilst the increase in sales promotes a positive message, overall new buyer demand dipped in the first month of the year and a dip in new enquiries during January. This could prove this level of activity is due to the stamp duty holiday.
Surveyors report that a lack of affordable mortgage finance continues to hold back the market, meaning house prices will continue to fall over the next three months.
The Council of Mortgage lenders said members advanced 18, 700 loans worth £2.3 billion to potentials in December.


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