House prices jumped 10% before stamp duty deadline

As the race between buyers picked up again ahead of the stamp duty deadline last month, house prices returned to double-digit growth in May. 

 

The latest figures from the Office for National Statistics showed prices increased by 10% in the year to May. Price growth had cooled slightly in April after the initial frenzy in March leading up to the original stamp duty deadline, but this figure has now been revised upwards - Where the ONS originally reported prices had increased by 8.9% over the year to April, the official figure now stands at 9.6%

 

The ONS had always warned fewer transactions were available than expected throughout the crisis, meaning there could be "increased volatility" in its figures. The average house cost in May was £255,000, an increase of £23,000 from the same month in 2020, and almost returning to the record price of £256,000 seen in March of this year.

 

Competition between property buyers had returned to full swing in May ahead of the deadline for the full stamp duty holiday. Gazumping and bidding wars were commonplace as those who completed before the end of June stood to save up to £15,000 in tax. According to the ONS the average house in England cost £271,000 in May after prices increased by the same rate of growth recorded in April - 9.7% over the year to May 2021, 

 

However, Scotland property showed a different picture. In April prices in Scotland fell by 3.5% month on month once stamp duty rates in the country returned to pre-pandemic levels, the drop leading analysts to warn of a similar impending cliff-edge when the tax break ends in England. 

However, new ONS figures for May showed house prices in Scotland hit the highest ever recorded average of £171,448. Annual house price growth in Scotland rebounded to 12.1%, up from 7.2% in April. Neal Hudson, of Built Place, said the Scottish market had also been driven by the "race for space".

 

While the ONS published its figures after other house price indices - such as those provided by lenders Nationwide and Halifax - it is considered to be the most accurate as it covers all property transactions. 

 

Whitestone Solicitors

Rochdale