UK house prices keep rising after tax break winds down

Most surveyors expect prices to continue rising over the next 12 months due to lack of supply

For sale signs advertise residential properties in north London, Friday June 12, 2003. House prices grew at their quickest pace in almost 1 1/2 years
during the first quarter, the Royal Institution of Chartered
Surveyors said today, as Britons borrowed a record 16.2 billion
pounds against their homes. Photographer:Andy Shaw/Bloomberg News
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A lack of new homes for sale in Britain boosted prices again last month, even as the market slowed after the partial withdrawal of a pandemic emergency tax break for buying properties, a survey showed on Thursday.

The Royal Institution of Chartered Surveyors' gauge of new buyer inquiries slipped in August to its lowest level since January, as did its measure of sales.

But with demand still far in excess of supply, a net 73 per cent of surveyors polled by the institution reported rising house prices, although that was down on 79 per cent in July.

Demand is being driven by people seeking bigger homes as they work remotely more often during and after the coronavirus pandemic.

Other surveys have also told of continued house price growth since July, when a year-long exemption from the stamp duty tax on house purchases was halved in England and Northern Ireland, and expired 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," institute economist Tarrant Parsons said.

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

A net 66 per cent of surveyors said they expected house prices to rise over the next 12 months, unchanged from July's reading.

Updated: September 08, 2021, 11:54 PM