Estate agent calls for stamp duty reform after rate rise

    FEARS that rising interest rates will see Britain’s housing market stall have been played down by an estate agent who says stamp duty has a bigger effect.

    A survey by the Royal Institution of Chartered Surveyors [RICS] found interest from buyers dropped in October, with the rate of sales slowing down in most regions.

    And the Bank of England raised rates by 0.25 per cent on November 2, the first such rise for a decade.

    But Nick Leeming, Chairman of estate agents Jackson-Stops, who have an office in Tunbridge Wells, said: “The moderate interest rate rise is unlikely to disturb the housing market.

    “Good things don’t usually last forever. The end of this golden period of great mortgage deals won’t be a surprise to the vast majority of prospective and current homeowners.

    “The market remained fairly stable throughout the General Election and the EU referendum, so it would be surprising to see activity levels or house prices fall as a result of such a modest change to interest rates.”

    The RICS found that only north-east England and Wales saw sales pick up in October. Elsewhere, some agents saw falls in demand of up to 80 per cent compared to the same  time last year.

    RICS Chief Economist Simon Rubinsohn has aired concerns about how the rate rise could impact on markets. However, Mr Leeming said a bigger impact could come from any reforms in stamp duty in this month’s Budget.

    “Traditionally, higher interest rates mean higher mortgage rates, so we may see those already on the fence about moving house take a ‘remain and renovate’ approach instead,” he said.

    “However, over the last year punitive stamp duty levels have been a real drag on the property market, and will continue to be unless The Chancellor announces stamp duty reform across all transfer values in the upcoming Budget.

    “The combination of stamp duty, high moving costs, economic uncertainty and potential further interest rates rises will represent a major barrier to home ownership.”