Property interest surges as stamp duty deadline looms

Estate agents have reported a surge of interest from potential buyers as the end of the Government's stamp duty holiday looms, it was reported today.

Countrywide Estate Agents, which has more than 1,000 branches across the UK, said it had seen a 69 per cent increase in inquiries from potential buyers during August, compared with the same month of 2008, and a 53 per cent rise in sales.

Some of the increased activity is likely to be due to growing evidence that house prices may have passed their trough, causing people to want to take advantage of recent price falls before the cost of property rises again.

But the group, whose brands include Bairstow Eves and Mann & Co, thinks people looking for properties under £175,000 are also been spurred on by the end of the stamp duty holiday for homes costing up to this level.

The Government announced in September last year that it was increasing the threshold below which stamp duty is not charged from £125,000 to £175,000 for one year, later extending the exemption until the end of 2009.

It is estimated that 60 per cent of buyers currently purchase a property for less than £175,000, but as it typically takes three months to buy a home from start to finish, people wanting to take advantage of the higher threshold need to act fast.

Stamp duty is charged at 1 per cent of a property's price on homes worth up to £250,000, meaning anyone who buys a £175,000 house after December 31 will face a £1,750 bill.

Robert Scarff, managing director of Countrywide Estate Agents, said: "Thousands of buyers have already benefited from the stamp duty holiday and it has brought some much needed relief for the property market - particularly for first-time buyers who underpin much of the market and stimulate house sales further up the chain.

"Buyer demand has increased over the last few months as house prices have begun to stabilise.

"However, lack of supply in key areas has already caused small house price increases in some areas where demand continues to outstrip supply."