LONDON (UK) – Asking prices for houses in Britain slipped over the past month for the first time this year, as the partial removal of a temporary cut to property purchase taxes took the edge off demand for larger homes, a survey showed on Monday.
Real estate website Rightmove said asking prices fell by 0.3% in its August survey after a 0.7% increase in July, dragged down by “upper end” houses of four bedrooms or more, which saw asking prices fall by 0.8% in July.
The August survey covered property first advertised on Rightmove between July 11 and August 7.
The readings chimed with a report from the Royal Institution of Chartered Surveyors last week, which also suggested the reversal of property purchase tax cuts had started to affect an otherwise strong market.
Finance minister Rishi Sunak cut stamp duty, a tax on house purchases, in July 2020. But from last month it started to return to its pre-pandemic level.
The tax cut aimed to reverse a slump in property sales at the start of the pandemic, and helped fuel a surge in property prices and some new construction. Many households were already seeking more spacious housing suited to working from home.
“Our analysis shows that average prices have only fallen in the upper-end sector, which is usually more affected by seasonal factors such as the summer holidays and has also seen the greatest withdrawal of stamp duty incentives,” said Tim Bannister, director of property data at Rightmove.
He said buyer demand remained strong, with Rightmove predicting a renewed bounce in selling activity and asking prices during the coming months.
“We also anticipate that more property will come to market when those owners have more clarity over their employers’ long-term balance of home and office working,” Bannister said.
