Stamp Duty Holiday Tapering Off Period – What Is Happening

Posted on: 22 September 2021

Stamp Duty Holiday Tapering Off Period – What Is Happening

At frank Schippers, we want you to make informed decisions regarding what is happening in the housing market. We speak with buyers and vendors in Crowthorne regularly, and we have a good feel what is taking place locally.

We also stay in touch with the latest issues, and what the main property portals are saying. One of the biggest issues in the current housing market is the tapering off of the stamp duty holiday, and it is likely to influence the market.

How much did the stamp duty holiday impact the market?

Key takeaways listed by Zoopla on this matter include:

  • The amount of tax paid by people buying a new home has nearly doubled despite the tax relief brought in by the government due to Covid-19

  • Buyers paid a total of £2.06bn in stamp duty in the 3 months to the end of June - 90% more than in the same period of 2020

  • Only 37% of people buying a home paid stamp duty during the period, compared with 64% a year earlier, and yet the value of the tax collected almost doubled

Significant statistics of the end of the full stamp duty holiday period

  • In the three months to the end of June 2021, there was a 175% increase in property transactions

  • 59,600 properties were purchased at a price of more than £50,000 in the three months to June 2021, which is significantly higher than the 13,000 bought at this price in the three months leading to June 2020

  • An additional £485 was spent by people who purchased buy-to-let property or a second home, with the 3% surcharge not being covered by the stamp duty holiday

  • A new surcharge of 2% was imposed (on 1st April) on overseas buyers purchasing a home in England or the North of Ireland, raising £19m

How is the market faring right now?

According to the latest UK House Price Index figures from the ONS:

  • Average property prices rose by 13.2% over the year to June 2021

  • This is the highest annual growth rate recorded since November of 2003

  • Average property prices in June were up 9.8% from May 2021

  • The average house price in the UK reached £266,000 in June 2021, which is a record high

  • The June 2021 average house price in the UK is £31,000 higher than the June 2020 figure

Rise in average house prices across the UK

Breaking the average house prices increase by country sees:

  • English house prices rising by 13.3%

  • Welsh house prices rising by 16.7%

  • A 12% rise in Scottish house prices

  • A 9% rise in the price of property in the north of Ireland

Sam Mitchell is the CEO of an online property market company and he said; “House prices continued on their upwards trajectory in June, with the latest ONS figures capturing the final frenzy amongst buyers and sellers before the stamp duty holiday scaled back. Despite the tax break now only being available to properties under £250,000, there are still other factors at play that will likely contribute to further house price increases in the months ahead. Historically low interest rates, an uplift in 95% mortgages and savings accumulated during lockdowns are all going to allow more people to enter the market.”

Sam Mitchell concluded by saying; “Let’s also not forget that the UK is still faced with a major supply and demand imbalance issue. A lack of new stock that fails to meet the demand we see today is enough on its own to push prices up. Particularly when we all appear to be looking for the same thing – a desire for more space, bigger gardens, and that now essential home office.”

If you have any housing market questions or queries, please feel free to contact us. If you plan on selling your home, we recommend arranging a property valuation to ensure you make an informed decision. At Frank Schippers, we are here to support you in this trying time, and you can call us on 01344 777 888.

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