A leading agency chief suggests there will have to be substantial bargaining between buyers and sellers as the stamp duty holiday cliff edge approaches.
Nicky Stevenson, managing director of Fine & Country UK, says: “It remains to be seen whether the Chancellor will announce any extension or form of tapered relief of stamp duty … This will undoubtedly impact sales activity in April and May, and the ability of buyers and sellers to negotiate on price will be critical to avoid sales falling though.”
According to Stevenson the Budget on March 3 will set the tone for the country for the year ahead, with many of the current economic support measures for individuals and businesses set to finish at the end of April.
She anticipates that reforms to Capital Gains Tax are likely to be included.
However, she believes the optimism in the wider economy generated by the Coronavirus vaccine programme - over 15m are set to have received their first vaccine dose by March - means consumer confidence and spending are likely to rise quickly.
At present the Office for Budget Responsibility forecasts the economy will return to its pre-pandemic levels within two years, with growth of 5.5 per cent in 2021 and 6.6 per cent in 2022.
“Looking specifically at the premium sector, the lifestyle changes sought by many in the wake of the pandemic are likely to ensure continued interest in the prime markets of the UK from both domestic, as well as overseas purchasers” says Stevenson.
“Virtual viewings are proving a lifeline for those seeking to purchase before the introduction of the two per cent overseas purchaser surcharge in April. Property prices across the prime market are predicted to rise in the region of four per cent over the course of 2021” she adds.
With regard to the mainstream market, Stevenson says it is unsurprising that there are signs of growth softening ahead of the stamp duty deadline.