Agents have expressed concern that the expiry of current Stamp Duty relief thresholds could result in a market correction in the form of a reduction in transaction volumes and cooling house prices, a survey commissioned by GetAgent has revealed.
Since the Autumn Budget, when the Government announced it would not be extending current Stamp Duty relief thresholds, agents noted an increased level of buyer enquiries being made and offers submitted.
The impending deadline is a motivator for buyers in the current market, with 47% of agents seeing a heightened sense of urgency among buyers with respect to completing before 1st April.
However, just 15% of agents reported seeing buyers offer above the odds on asking price, in order to secure a property at a quicker pace.
47% of agents expected to see a higher level of market activity continue to take place during the first three months of this year compared to the usual seasonal trends.
38% said the market would see an increase in fall-through rates among those buyers who fail to complete before the deadline.
47% said the market would see a drop in transaction levels in the months that follow the 31st March deadline, while 45% were also concerned that house prices could also take a dip.
Colby Short, co-founder and CEO of GetAgent.co.uk, said: “The Government’s decision not to extend current Stamp Duty relief thresholds has certainly spurred an increase in buyer activity, with those who may have previously been on the fence now eager to complete before 1st April to secure a saving.
“The good news is that only a small proportion of these buyers are offering above the odds to secure a property in time, which should prevent the market from overheating to the same extent we’ve seen following previous Stamp Duty deadlines.
“However, a heightened level of buyer activity will inevitably drive both transaction volumes and house prices upwards, leaving many agents reasonably concerned about a potential market correction once the deadline passes.”
Short added: “Of course, a correction is certainly not a crash and so whilst we may see a momentary dip in activity during the second quarter of this year, we expect the market landscape to steady and for any correction seen to be short lived.”
