In the last week, property experts at the Royal Institution of Chartered Surveyors (RICS) have expressed concern about the finish of the stamp duty holiday at the end of this year and the knock-on negative impact it would have on the property market. RICS has added to its earlier concern by saying that the housing market is struggling in some difficult areas in the UK, and the abolition of the stamp duty holiday could bring about a total market collapse in those areas.
An e1buytoletmortgages.co.uk report said that the starting point for stamp duty was raised from ?125,000 to ?175,000 as a temporary measure to help the recovery of the housing market, but on 1 January 2010 the starting point will once again return to ?125,000. RICS surveyors fear that housing activity could fall to almost zero if the Government reverts back to the old stamp duty threshold as it has said it will.
RICS experts fear that doing so will seriously affect areas already lagging behind in the property market recovery ? such areas include the East and West Midlands, Wales and Scotland. These areas are most at risk because most properties in those areas fall into the price range of ?125,000 to ?175,000.
However, it is also pertinent to note that house prices in Wales and East Midlands have already been falling in recent months, according to surveyors at RICS, so the impact might not be quite as harsh in a property market that is already poor.
Simon Rubinsohn, RICS economist, said that any increase in the cost of a property transaction could easily put off potential buyers ? especially first-time buyers, who are vital to the market. Such a deterrent could pose a threat to the fragile market recovery in those regions.
