U.K. house prices continued its upward trend in March, as first time buyers rushed to avail the stamp duty exemption, a survey carried out by Rightmove showed Monday.
Asking prices of property for sale grew 1.6 percent month-on-month in March, following the 4.1 percent increase in February. In the first quarter, house prices were up 4.9 percent, marking the largest increase since 2004.
The annual rate of growth in house prices accelerated to 2.2 percent from 1.4 percent in February. Rightmove said search activity was up by 16 percent so far in 2012 compared to 2011, indicating growing confidence to move.
But it warned that the end of the stamp duty holiday will be a double blow for first time buyers. The government is unlikely to extend the tax break in the new budget to be unveiled on Wednesday.
The firm termed the proposition of raising the necessary deposit tough, while also standing to lose between GBP 1,250 and GBP 2,500 in stamp duty exemption now. Additionally, asking prices for their target property types have increased by over GBP 5,000 in the last year as well.
The survey showed that London house prices hit a record high in March.
The Nationwide's February survey also suggested an acceleration in house prices due to a temporary rise in first time buyers entering market. Nationwide's Chief Economist Robert Gardner said it remains to be seen whether this trend will be sustained going forward.
A survey from Markit Economics revealed a deterioration in British households' views of residential property prices in March. Meanwhile, households' expectations of changes in house prices in the next twelve months, rose to a near two-year high.
by RTT Staff Writer
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