Housing rebound 'runs out of steam'

A recent rebound in the housing market has "run out of steam" following the ending of a stamp duty concession for first-time buyers, a study said.

The number of newly agreed sales has weakened, with a balance of 6% of chartered surveyors across the UK reporting decreases rather than increases in sales in April, the first time transaction levels have entered negative territory since last September.

Some 19% more surveyors reported house price falls rather than rises and a balance of 17% believe that prices are set to drop further, the Royal Institution of Chartered Surveyors (Rics) said.

London, which has had strong demand from overseas buyers, was the only region to report a general rise in prices, while the West Midlands and Wales experienced the worst price deteriorations, the study said. The situation for Scotland remained largely unchanged, while Northern Ireland continued to see a deterioration.

Lenders and estate agents previously reported a rush to complete deals ahead of the stamp duty concession deadline, which ended in March, warning that this could result in sales which would have otherwise taken place later this year being bunched up.

Around four in 10 first-time buyers who bought homes during the two-year stamp duty holiday period benefited from the exemption on properties priced under £250,000.

Peter Bolton King, Rics housing spokesman, said: "With the recent surge in activity brought on by March's stamp duty holiday coming to an end, it is unsurprising to see that prices across much of the country are continuing to fall. Renewed concerns over the economy and talk of a double-dip recession dominating the headlines in recent weeks may well have served to undermine consumer confidence.

"What's more, the continuing lack of affordable mortgage finance is still hindering many first-time buyers who cannot afford to get a foot on the property ladder."

Buyer demand was described as "flat" in April, with 5% more surveyors reporting increases rather than decreases in new buyer inquiries, down from 10% more in March.

Meanwhile, the number of homes being put on the market remained "stable", with a balance of 1% more surveyors reporting falls rather than rises in new homes going up for sale.