Friday, May 7, 2021
Real EstateUK

House prices climb as home-buyers rush to save on stamp duty

house price climb

According to analysis by Halifax, the average house price for home-movers was £373,537 in the first half of 2020

House prices have climbed by £57,000 across England and Wales as home-buyers rush to take advantage of stamp duty savings, according to analysis.

According to Halifax, the stamp duty holiday introduced last July is set to end on March 31 – and the average stamp duty saving being made by home-movers is £11,566.

But strong demand has added to the upward pressure on house prices, in many cases eclipsing the stamp duty savings that can be made.

The average house price for home-movers was £373,537 in the first half of 2020, Halifax found.

But, the average property price was £57,790 higher, at £431,327 in the last six months of the year – an increase which equates to around five times the amount saved on stamp duty.

Stamp duty applies in England, while in Wales it was replaced by the land transaction tax.

A similar temporary holiday has been applied to the land transaction tax in Wales.

Andy Bickers, mortgages director, Halifax, said: Since the summer we have seen a huge surge in mortgage applications, as people raced to make much-sought-after stamp duty savings.

We know that lockdown restrictions have made it more practically challenging for those buying and selling, but the stamp duty holiday has been one of the main drivers of continued demand for sales and purchases during the pandemic and we will wait to see if further steps are taken that could give people more time, Bickers said.

The proportion of home-movers paying stamp duty on transactions dropped from 93% in the six months to June 2020 to 26% in the six months to December, according to calculations by Halifax.

During the holiday period, around two-thirds (67%) of home-movers in London have paid stamp duty on their home purchase, followed by nearly four in 10 (39%) in the South East, Halifax estimates.

Higher house prices in these regions mean many buyers still need to pay some stamp duty, above the temporary £500,000 threshold.

The smallest proportions of home-movers (4%) still paying property taxes were in the North East of England.

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