UK house prices rise at fastest rate in 17 years as stamp duty holidays end Business News

UK house prices have jumped over the past year at their fastest pace since 2004, according to an index.

Nationwide found that selling prices jumped 13.4% in the 12 months to June, as experts predicted a “cocktail of forces” would continue to support the booming market.

Despite the economic upheaval of the pandemic, the average price of a home rose 0.7% in June, after rising 1.7% in May.

The increases mean prices have risen nearly 5% since March. Real estate agents have reported a rush of buyers looking to move their real estate purchases forward before the stamp duty holiday begins to decline on June 30.

Currently, the first £ 500,000 of a property purchase is tax free, saving buyers up to £ 15,000. The threshold is to be lowered to £ 250,000 from July 1 and return to its pre-pandemic level of £ 125,000.

The stamp duty rate ranges from 2 percent to 12 percent of the purchase price, depending on the value of the property purchased, the date of purchase and whether you are a multiple owner.

Prices were also supported by ultra-low interest rates and households who were able to save more for a deposit during a series of coronavirus lockdowns.

Martin Beck, Senior Economic Advisor, Club EY ITEM, said: “Property prices continue to benefit from a cocktail of forces driving demand.

“The extension of the stamp duty exemption appears to have piqued the interest of potential buyers before the tax exemption began to be lifted on June 30.

“These older and higher income households – and generally home owners – have emerged from the pandemic in relatively good economic condition, also continuing to insulate the real estate market from the impact of Covid-19. “

Rapidly rising house prices are making home ownership unaffordable for some people, said Robert Gardner, Nationwide chief economist.

“Improving the availability of mortgages for those with a small deposit (and the continued availability of the government’s Help to Buy equity loan program) is helping some people overcome the deposit barrier, but it is still very difficult for some. most, ”he said.

“House prices are close to an all-time high relative to average incomes. This is important because it is even more difficult for potential first time buyers to collect a deposit.

“For example, a 10 percent deposit is more than 50 percent of a typical first-time buyer income. A potential buyer earning the average salary and saving 15% of their take-home pay would now take five years to raise a 10% down payment.