RICS: Stamp Duty changes have caused subdued Spring for home sales

The drop in Stamp Duty thresholds put pressure in the housing market in April, with sales activity hitting a two-year low, research suggests.

The latest RICS Residential Market Survey for April reveals another drop in buyer enquiries and agreed sales, with ongoing economic uncertainty and higher purchase costs continuing to weigh on confidence.

A net balance of –31% of survey participants reported a decline in agreed sales over the month, the weakest figure recorded since August 2023, which RICS said pointed to a subdued Spring market.

New buyer interest also declined for the third consecutive month, reporting a net balance of -33% indicating a fall in enquiries. This reflects growing caution from prospective buyers alongside affordability pressures and tight borrowing conditions.

On the supply side, new instructions to sell remained flat, posting a net balance of +6% for the second month in a row. Similarly, the flow of property appraisals only rose marginally suggesting no meaningful change in supply conditions in the near term.

Short-term expectations remain modest, with a net balance of –15% anticipating a further dip in sales over the next three months. Despite this, there are signs of improvement on the horizon. A net balance of +17% of respondents expects sales to rise over the year ahead, up from +11% in March, suggesting that longer-term sentiment remains more positive.

House prices held steady in April, slipping slightly into negative territory at –3% from +2% previously. While short-term price expectations remain cautious, with a net balance of –21% of respondents anticipating some downward pressure over the next three months, the longer-term view is more resilient. A net balance of +39% of survey participants expect prices to return to growth over the year ahead.

Simon Rubinsohn, chief economist for RICS, said:

“Although geopolitical developments haven’t helped the mood music in the residential market over the past month, the main reason for the dip in the key RICS sales activity metrics lies in the expiry of the Stamp Duty holiday at the end of March.

“Near term expectations indicators suggest the subdued trend will persist for the next few months at least but looking beyond this, the results are more encouraging reflecting in part the prospect of deeper interest rate cuts than previously anticipated.” 

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