A U.K. house-price index rose to a 21-month high in March as first-time buyers sought to take advantage of an expiring property-tax exemption, the Royal Institution of Chartered Surveyors said.
The gauge rose 3 points from February to minus 10, the highest reading since June 2010, according to a report today e- mailed by London-based RICS, which conducts a monthly survey of property surveyors nationwide. Still, a reading below zero shows more surveyors saw price drops than gains last month.
The figures reflect Britons taking advantage of a two-year stamp-duty exemption for first-time buyers purchasing a home costing less than 250,000 pounds ($400,000) before it ended on March 24. A continuation of this year’s upward trend in the gauge is uncertain given economic difficulties faced by the U.K., RICS Chief Economist Simon Rubinsohn said in a statement.
“Demand saw a slight boost in March as many first time buyers looked to beat the stamp duty holiday deadline,” Rubinsohn said. “There has been a gentle increase in activity across the market in the early part of the year but it remains to be seen whether this can continue, given the changes in the budget and ongoing problems affecting the economy.”
U.K. Chancellor of the Exchequer George Osborne raised taxes on home purchases of 2 million pounds or more to 7 percent from 5 percent in his annual budget on March 21. The U.K. economy probably just avoided a technical recession of two consecutive quarters of falling economic output by growing 0.1 percent in the first quarter, the National Institute of Economic and Social Research said on April 6.
RICS’s index of price expectations for the next three months fell to minus two in March from zero the month before, while a measure for expectations over the next year dropped to nine from 11, after rising above zero in February for the first time in 21 months.
A gauge of expected sales declined one point to 20 while RICS’s index of new buyer enquiries, an indicator of demand, climbed to 9 from 3. A measure of sales per surveyor fell to 15.5 from 15.9.
London was the only region out of 12 tracked by RICS where more surveyors reported price rises than falls, recording a price gauge of 58 in March. The measure for Northern Ireland was the weakest at minus 52.
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