Posted: Wednesday 1 August 2012
The recent article in The Herald in relation to the Stamp Duty holiday that came to an end earlier this year provides some interesting statistics. I would, as always, emphasise great care be taken when analysing any report which involves ‘average figures’, as without relevant detailed background information to ensure that a like-for-like comparison is being utilised, they are of little benefit.
The important information to note in this article is that there has been a notable uplift in the number of property transactions across the nation, which is always good to hear. I personally believe that this is as a result of a variety of factors and in particular feel that one of the major contributors is that sellers are now starting to realise that they must adjust their expectations in relation to sale price. This factor is reflected in the overall drop in the average sale price year on year whilst properties sale numbers are up.
The Stamp Duty holiday, which ended in March, has resulted in an increased level of activity in this sector of the market, with many individuals and families taking advantage of the tax relief. This included the traditional first time buyer, but also, to a degree, individuals taking advantage and using family money to get younger members of the family on to the property ladder.
The significant benefit has been that the first time buyers coming into the market have, by default, freed up many owner occupiers to move on up the ladder in areas where property sales had stagnated due to a lack of purchasers. This is demonstrated with increased sales right across the market as the ripple effect comes into play.
Unfortunately, or not depending on who you may be, I don’t envisage significant price rises. However, it is now important for all concerned that the momentum is maintained and that appropriate funding is available for first time buyers to enter the market at a reasonable level.