Average UK house prices now stand at £265,000
The stamp duty holiday at the current threshold of £500,000 will come to an end on 30 June, and will stagger back to normal levels before the final deadline in September.
The question on everyone’s minds now is what the end of the stamp duty holiday will mean for the housing market.
The stamp duty holiday has buoyed the property market during the pandemic, with greater demand for property and surging housing prices.
According to figures released by the ONS, average house prices in the UK have jumped by 8.9% for the year to May 2021, now standing at £265,000.
GoodMove, the property buyer, carried out research which found that 39% of Brits took advantage of the stamp duty holiday when buying their home during the past year. It is estimated that they made savings of up to £15,000.
“The stamp duty holiday, as well as demand for more spacious properties fuelled by lockdown, has helped the property market succeed through what has been an immensely difficult year in other industries,” said Ross Counsell, chartered surveyor and director at GoodMove.
But what does the stamp duty holiday exemption mean for the housing market for the rest of 2021?
“As we have seen from HPI statistics across the year, the housing market has become extremely saturated, following people rushing to buy properties to meet the deadline. Mortgage approvals and new buyer enquiries for properties have risen by 44%⁴ with the rise in demand reflecting the inflation of house prices,” said Ross Counsell.
“In a sense, the government’s exclusion of contract exchange with Stamp Duty may be of benefit in the long run. We can expect to see a decline in demand from October once the deadline officially ends, and expect this to be a better time to buy a property this year before rushing to try and meet the deadline.”
Counsell is of the view that buyers should wait to purchase property until the end of the new deadline.
“For anyone looking to purchase a property, the advice is simple – hang fire. If the statistics are reflective of anything over the past year, the Stamp Duty is of benefit to only one side of the coin – the sellers. If buyers can wait it out until the end of the deadline, they should expect to save a significant amount of money on a property,” Counsell said.
“A home is the heart of you and your family, and with only three months to go until the end of the Stamp Duty deadline, it’s worth buyers taking their time to find their dream property. Such a significant stage of life should not be rushed, as this can cause dissatisfaction in the long term.”