LONDON (Reuters) – The boom in Britain’s housing market cooled sharply in January as the country went back into coronavirus lockdown and a tax break for buyers neared its expiry, a survey showed on Thursday.
House price growth slowed more than expected by economists polled by Reuters and prices in London fell for the first time since July, the Royal Institution of Chartered Surveyors said.
A measure of properties hitting the market was the second-weakest on record, excluding a slump during the first lockdown last year when the sector was closed along with much of the ret of the economy.
Near-term sales expectations were close to a pre-pandemic record low. New buyer enquires and agreed sales also fell.
Britain’s housing market unexpectedly took off in the late spring of 2020 as people who had been stuck in their houses during the first lockdown sought bigger homes. A tax break for buyers also spurred demand.
The stamp duty tax exemption is due to expire at the end of next month although media have said finance minister Rishi Sunak might extend it in his March 3 budget statement.
Other gauges of the housing market have also suggested recently that last year’s boom has run its course, including the first month-on-month falls since mid-2020 in house prices as measured by mortgage lenders Nationwide and Halifax.
A Reuters poll of analysts published last week showed prices were expected to flat-line this year before rising by 2.7% in 2022.
RICS Chief Economist Simon Rubinsohn said despite attempts to keep the housing market open in the latest lockdown that began in January, there had been an impact on activity.
“The appeal of properties with more room and outside space is, meanwhile, a theme that continues to be strongly evident in the responses to the survey,” he said.
In the rental market, concerns about a slow flow of properties coming on to the market – reflecting regulatory and tax changes – were pushing rents higher. The exception, again, was London where private rents were viewed as remaining under pressure over the coming months.
(Reporting by William Schomberg, editing by Andy Bruce)
