Will stamp duty changes affect the property market?

Will stamp duty changes affect the property market?

It's been a little under a month now since the chancellor announced changes to the stamp duty tax for the UK property market, and predictions about what this will mean for the market are starting to filter through now. 

In the final day before the change, which sees property stamp duty calculated proportionately in the same way as income tax rather than a flat rate for the full price of the home, there was a rush on more expensive properties, after it became clear that those buying the most expensive houses would need to pay a lot more than they currently do for their stamp duty. 

However, it has since calmed down, and the majority are positive about it. For most people, particularly first timers and those a little lower down the property ladder, the change will mean that they end up paying far less in tax than they would have done in the past. 

So what will this mean for the property market in 2015? According to the Royal Institute of Chartered Surveyors (Rics), it should be good news in general. Whereas in the past, forecasts for 2015 have suggested that the market would see a large slowing down, especially in the first part of the year, Rics believes this stamp duty change will reinvigorate buyers and get more coming to market, helping keep demand and prices rising. 

It said that for 2015 as a whole, the stamp duty changes should mean house prices climbing by three per cent as buyers try to get themselves on to the ladder and take advantage of the lower rates of tax they would face. 

Rics added that in terms of house price rises, this should help to add to the modest increases that it has already predicted across the course of the next year. The boost will be welcome, and follows in a long line of moves that helped to give the property market an extra edge, from the likes of the previous government's stamp duty holiday, to the current incumbents' Help to Buy scheme that really invigorated the market last April and throughout 2013. 

It won't just be house prices that climb, however, with the report from Rics also stating that the company expects to see rents rise in 2015. The rental market has weathered the storm now from a number of changes that have come into play and boosted sales, and this should be no different. 

Rics believes that 2015 will see the cost of renting a property rising by as much as two per cent as landlords continue to experience real strength in their income.