End of stamp duty holiday 'could impact on property recovery'

Wednesday, November 18th 2009

The housing market in certain areas of the UK could be negatively affected by the end of the stamp duty holiday for properties worth between £125,000 and £175,000.

This is according to the Royal Institution of Chartered Surveyors (Rics), which said that the end of the holiday on December 31st is likely to see the property market recovery in some regions suffer a setback when the previous stamp duty rates return.

It revealed that more surveyors in Wales and the east Midlands are still seeing price declines rather than increases, while other potentially affected areas include the West Midlands and Scotland, where house prices sit within the margins impacted by the stamp duty holiday.

Simon Rubinsohn, chief economist for Rics, said: "The additional transaction cost is still a worry to many, particularly first-time buyers, and is a threat to the market in the areas of the country that are still seeing a weak price environment."

According to the Council of Mortgage Lenders, the stamp duty holiday meant one-third of first-time buyers did not have to pay the charge in September.