House prices fall as stamp duty holidays dwindle Business News

The price of an average UK home fell 0.5% in June at the end of the full stamp duty holiday, industry figures show.

This was the first month-over-month decline since January and suggests peak buyer demand has likely passed, a study from Halifax found.

However, the bank said typical properties were still more than £ 21,000 higher than a year ago, with an average house costing £ 260,358 last month.

The June price decline caused annual house price inflation to drop slightly to 8.8 percent, from 9.6 percent in 14 years.

The stamp duty holiday in England and Northern Ireland is being reduced and will be phased out entirely in the fall.

The range of ‘zero rate’ stamp duty has increased from £ 500,000 to £ 250,000 from July 1, prompting a rush of buyers trying to pass the deadline. It will return to its normal level of £ 125,000 from October 1.

Russell Galley, Managing Director of Halifax, said: “With the phasing out of the stamp duty holiday, it was anticipated that the market could start to lose momentum in the second half of the year, and it Those whose mortgages were approved in the early summer are unlikely to benefit from the maximum tax relief, given the time required to complete transactions.

“That said, with the tapered approach, those who buy at the current average price of £ 260,358 would still only pay around £ 500 in stamp duty at today’s rates, rising to around £ 3,000 when the going will return to normal from the beginning of October.

“Government support measures over the past year have helped stimulate demand, especially among buyers looking for larger family homes in the higher end of the market.

“Indeed, the average price of a detached house has risen faster than any other type of property over the past 12 months, up more than 10% or almost £ 47,000 in terms of cash.

“At a cost of over half a million pounds, they now cost £ 200,000 more than the typical semi-detached house.

“This power of movers to stimulate the market, as people seek to find properties with more space, boosted by the increase in time spent at home during the pandemic, will not fade completely as the The economy will recover.

“Coupled with buyers looking for the relatively small number of properties available and persistently low borrowing rates, this is a trend that can keep average prices high for quite some time to come. “

Halifax said Wales continued to experience the strongest annual growth in house prices, recording its best performance since April 2005 with a figure of 12%.

For Northern Ireland and Scotland, annual price increases were the highest recorded since late 2007, while for the North West and Yorkshire, price inflation was the highest since early 2005, according to the report.

In London, property values ​​rose only 2.9% year-on-year.

Tomer Aboody, director of mortgage lender MT Finance, said: “Even though property price increases in London have been less dramatic than elsewhere, prices are still at their highest level in the capital and continue to rise. increase, putting ownership even more out of the reach of first-time buyers in particular.

Anna Clare Harper, managing director of real estate consultancy SPI Capital, said that while the reduction in stamp duty relief means less pressure on the demand side, “supply is still limited, construction is getting more. difficult and more expensive, and a massive sale of owners is unlikely in the absence of significant interest rate hikes ”.

Annual increase in the average house price in the region

  • East Midlands, £ 214,542, 8.6%
  • East England, £ 303,834, 7.6%
  • London, £ 511,234, 2.9%
  • North East, £ 152,989, 9.2%
  • North West, £ 201,836, 11.5%
  • Northern Ireland, £ 163,484, 11.5%
  • Scotland, £ 183,359, 10.4%
  • South East, £ 353,618, 7.3 percent
  • South West, £ 269,142, 9.8%
  • Wales, £ 192,507, 12.0%
  • West Midlands, £ 221,661, 8.1%
  • Yorkshire and Humber, £ 185,229, 10.9%

Additional reporting by the Press Association

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This notice was published: 2021-07-07 12:48:59

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