Stamp duty 'compounding slow-down'

Government indecision on stamp duty has reduced the number of sales in the housing market, according to the National Association of Estate Agents (NAEA).

The NAEA claims the number of first-time buyers and the number of houses available for purchase have continued to decline in August.

On top of this the association says the gap between asking prices and the amount a property sells for is widening and the percentage of sales which fell through increased last month.

Chris Brown, president of the NAEA, said: "August was a tough month for the industry, both for the consumer and estate agent."

"It was a month of indecision and this evidently has had a profound effect on the market," he added.

According to Richard Hair, from the Essex branch of the NAEA, banks and mortgage lenders need to "loosen their purse strings" to ease the pressure on the market.

Meanwhile, the government has extended its special liquidity scheme from October 21st until January 2009.

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