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UK house prices keep rising even as tax break unwinds: RICS

UK house prices soar again, fuelled by dearth of sellers: RICS
UK house prices soar again, fuelled by dearth of sellers: RICS   -   Copyright  Thomson Reuters 2021
By Reuters

LONDON – A lack of new homes for sale in Britain boosted prices again last month even as the housing market slowed following a partial withdrawal of a pandemic emergency tax break for property purchases, a survey showed on Thursday.

The Royal Institution of Chartered Surveyors’ (RICS) gauge of new buyer enquiries slipped in August to its lowest level since January, as did its measure of agreed sales.

But with demand still far in excess of supply – driven by people seeking bigger homes as they work remotely more often after the coronavirus pandemic – the vast majority of surveyors polled by RICS – a net 73% – reported rising house prices, albeit down from a reading of +79% in July.

Other surveys have also pointed to continued house price growth since July when a year-long exemption from the stamp duty tax on house purchases was halved in scale in England and Northern Ireland and expired altogether in Wales. Scotland ended the incentive in April.

“While momentum has eased relative to an exceptionally strong stretch earlier in the year, there are still many factors likely to drive a solid market going forward,” said RICS economist Tarrant Parsons.

“Given the real shortfall in new listings becoming available of late, there remains strong competition amongst buyers and this is maintaining a significant degree of upward pressure on house prices.”

A significant majority of surveyors – a net 66% – said they expected house prices to rise over the next 12 months, unchanged from July’s reading.