A recent surge in property prices is coming to a close as the stamp duty holiday is withdrawn, bringing an end to a boom that has seen increases in the cost of housing hit a 17-year high.
The holiday, brought in alongside a raft of other measures designed to cushion the impact of COVID-19 restrictions on ordinary families, has been credited with causing the surge, alongside a general desire for more living space caused by the realities of lockdown life. This surge sent house prices soaring to a level 10.5% higher than the same time last year, with the average residential property now costing £244,229, as buyers rushed to make purchases in anticipation of the measure’s tapered withdrawal.
However, that effect is beginning to wane, as houses worth more than £500,000 which led to the boom with a 37% year on year, increase become eligible for the full level of stamp duty payments again. This is likely to halt the steep rise in prices seen in recent months, but it may not puncture a hole in the market as some have feared.
Martin Beck, a senior economic advisor to the EY Item Club, said: “The pandemic has had potentially long-lasting effects on property preferences, not least raising demand for larger homes in a world of more home working. Combined with fuel for property deposits provided by the substantial savings accumulated by households during lockdowns, the ingredients are in place to maintain house prices at current, elevated, levels.”
Brought in during July 2020, the stamp duty holiday was designed to help people whose circumstances were affected by COVID to move house and brought the cost down to zero for houses worth less than £500,000. After almost a year, the holiday is now being slowly withdrawn and only affects houses worth less than £250,000 from 1 July 2021, and from 1 October the cost will go back to pre-pandemic levels.
Need to make your move before it’s too late, or do you want to strike while the iron is hot and get the most value for your assets? Get in touch with OGR Stock Denton. With 50 years of experience providing residential property services to thousands of families across London and the UK, we have the experience and skills to make your purchase or sale as quick and easy as possible.
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