A U.K. house-price index rose to a 19-month high in February as first-time buyers moved to beat the expiration of a property-tax exemption, according to the Royal Institution of Chartered Surveyors.
The gauge based on a survey by London-based RICS increased 3 points from the previous month to minus 13, the strongest reading since July 2010, it said in a statement today. Still, with the measure below zero, that indicates more surveyors saw price declines than gains last month.
The figures partly reflect Britons looking to take advantage of a two-year stamp-duty exemption for first-time buyers purchasing a home for less than 250,000 pounds ($390,800) before it ends on March 24. While such “temporary factors” are boosting activity, an improving economic outlook is bolstering longer-term price expectations, despite tight lending conditions, the group said.
“With the recent upturn in activity brought on by the end of the stamp-duty holiday, it seems that a renewed sense of optimism may be slowly returning to the property market,” RICS housing spokesman Alan Collett said in a statement. “However, with affordable mortgage finance still out of reach for many potential first-time buyers, it remains to be seen whether the more optimistic outlook for future sales can be sustained.”
RICS’s index of price expectations for the next three months climbed to zero in February from minus 14 in January, while a measure for expectations over the next year increased to 11 from minus 4, the first time it’s been above zero for almost two years. A gauge of expected sales was unchanged at 20. RICS’s index of new buyer enquiries, an indicator of demand, climbed to 3 from minus 7 and a measure of sales per surveyor rose to 16 from 15.7.
The group said the report indicated a “generally flat picture” for the U.K. housing market, though London “continues to stand out as being particularly buoyant.”
The capital recorded a price gauge of 53 in February, the only area out of the 12 tracked by RICS to show a reading above zero. The measures for the West Midlands and Northern Ireland were the weakest, both posting a reading of minus 47.