House prices rose by 13% ahead of stamp duty cut-off

A frenzy of buyers rushing to complete their purchases ahead of the winding down of the stamp duty holiday pushed house prices to a record high in June

 

Figures from the Office for National Statistics (ONS) revealed that the average house price jumped by 13.2% - or £31,000 - in the year to June to hit £266,000, the highest rate of growth since November 2004. This beats the previous record in March when the average price totalled £256,000 ahead of the original stamp duty deadline before it was extended by the Chancellor in the Budget.

 

Available on purchases worth up to £500,000 in England and £250,000 in Scotland and Wales, the tax break was introduced in July last year to boost a struggling housing market and was set to end on March 31st, If buyers were able to complete by this date they made potential savings of up to £15,000 before they dropped to a maximum of £2,500. The Chancellor then extended that deadline to June 30th to avoid a cliff edge that could have scuppered many sales, and the stamp duty holiday was then tapered out by decreasing the threshold to £250,000 in England until the end of September. HMRC said there were 198,240 transactions in June, higher than the previous record of 183,830 in March 2021.

 

The available tax savings, and an ongoing race for space among buyers, have been credited with pushing up prices since the holiday was announced last summer, while a severe shortage of houses for sale has fuelled bidding wars and forced more than a hundred thousand sellers to rent this year, and gazumping has been widespread.

 

The ONS said house price rises had been "further exaggerated" in June, but the challenges of collecting data throughout the pandemic and the sheer number of transactions left the figure open to large revisions. The ONS said that London recorded the lowest level of house price growth in June, but still showed an increase of 6.3 per cent. In contrast, the North West had the highest rate in England, at 18.6%, followed by the North East, Yorkshire and the Humber, and the South West. House prices in Wales rose by 16.7% over the year.

 

House price growth is now expected to cool and early indicators suggest asking prices have already begun to drop, with Nationwide recording a 0.5% fall in house prices in July, after the tapering of the tax break.

 

PM Law 

0114 249 6926