The UK property market continued its slump in August as the Royal Institution of Chartered Surveyors (RICS) said sales were at their lowest level since 1978. This comes as news that the output of the UK economy fell from June to August, according to the National Institute of Economic and Social Research (NIESR). The output of the economy fell 0.2% during July in the think tank’s latest report.
According to RICS, the average number of transactions per surveyor fell even as sellers lowered their asking prices to more realistic levels. The government has recently raised the threshold for stamp duty, but even this may not be enough to help the sagging market. The new stamp duty won’t take effect until the price is above £175,000, up from £125,000. The government estimates that half of all transactions will now be exempt from stamp duty, which is up from one third under the old value.
RICS spokesperson Jeremy Leaf noted that: “A lack of mortgage liquidity is the key issue which is keeping the housing market from showing any real sign of recovery.”
“While money is scarce, many will continue to be denied the next step on the property ladder. The Government’s stamp duty policy will not be enough to kick-start transactions and is more likely to assist buy-to-let investors with better access to finance than the first-time buyers it was aimed at.”
“In the absence of much transactional activity many home owners are being forced to rent their properties while they wait for lending criteria to be loosened and demand to pick up.”
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