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Stamp duty holiday boosts housing but retail continues to stutter, says RICS

The final weeks of the stamp duty holiday boosted new house buyer enquiries to their highest in two years, according to latest RICS research.

But demand for retail premises continued to stutter in the first three months of 2012, resulting in a further drop in rental expectations.

The Royal Institution of Chartered Surveyors UK Housing Market Survey for March and Q1 Commercial Market Survey were released today.

Housing enquires edged up in March, with nine per cent more surveyors reporting increases rather than decreases in demand.   London was the star performer once again.

The survey shows that new properties coming onto the market remained stable with a net balance of two per cent more respondents reporting rises in new instructions (from +7 percent more in February).

RICS Chief Economist Simon Rubinsohn said:  “There has been a gentle increase in activity across the market in the early part of the year but it remains to be seen is whether this can continue, given the changes in the budget and ongoing problems affecting the economy.

“London continues to outperform the rest of the UK in terms of prices but, interestingly, the North West did see an increase in activity in March.”

But interest from potential tenants of retail space continued to fall in the three months to March, says RICS, as a net balance of 11 per cent more respondents reported reduced demand. This was mirrored by increasing availability of unoccupied floor space (net balance +17).

Rental expectations for the retail sector were firmly negative with 28 percent more surveyors predicting falls rather than rises in rental values over the coming three months. Significantly, every region in the UK reported negative readings for rental predictions.

New developments starts were once again in negative territory during the early part of the year (net balance -7). This has been the case in every single quarter since the onset of the credit crunch in the middle of 2007. Notably, surveyors in all regions of the country reported falling development levels. 

Mr Rubinsohn added:  “Across many parts of the country, it seems that the commercial property sector in general is continuing to struggle, with a lack of affordable finance proving a big barrier to growth.”

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