UK house prices have seen their largest rise in value since October 2016, according to Zoopla. The property site has also revealed that despite the stamp duty threshold changing tomorrow, there is no sign of the market “cliff edge” many experts feared. Buyer demand is down by 28 percent compared with the pandemic’s peak.
According to Zoopla, housing stock is being “absorbed” by first-time buyers who are looking to take advantage of their stamp duty exemptions, and mortgage options.
As more house prices increase, a staggering 1.8 million UK homes have been pushed into the higher stamp duty bracket.
The property tax relief is due to change from tomorrow, when the threshold will be reduced from £500,000 to £250,000.
Of all UK homes, 940,000 additional properties will now attract some level of stamp duty at five percent should they sell, and an extra 130,000 will command some level of stamp duty at ten percent.
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The number of homes in the lower stamp duty bands in England is falling, while price growth means it is rising for the top bands.
Below the stamp duty threshold, the property market is also continuing to thrive.
Homes priced up to £250,000 are exempt from paying any stamp duty until the end of September.
While demand for homes under £250,000 is down by 24 percent compared to April, demand levels are 75 percent higher than the average recorded in 2019.
Demand for properties priced over £250,000 has also dipped by a third since April but remains up 86 percent compared to 2019 levels.
Grainne Gilmore, Head of Research at Zoopla, said the stamp duty holiday boosted demand and it looks as though that won’t change despite the SDLT threshold changing tomorrow.
She said: “The stamp duty holiday boosted demand in the housing market, yet buyer demand remains elevated despite the initial holiday ending – signalling that the once-in-a-generation ‘reassessment of home’ has further to run this year.
“Demand may ease further as the reopening of the economy allows people to do more and travel more widely, but at the same time, the confirmation of working practices for office-based workers will lead to more homebuyers being able to push ahead with a move.
“The total stock of homes for sale continues to run well below historical norms, and this will underpin pricing.
“At the same time, it may also constrain potential activity, especially for buyers looking for family houses.
“Even so, we forecast that this year will be one of the busiest for the housing market since the global financial crisis – with 1.5 million residential transactions.”
Kate Eales, Head of Regional Agency at Strutt & Parker said: “Time to sell has roughly halved since 2019 despite the stamp duty holiday extension coming to an end.
“In the past, properties that may have taken weeks to go under offer are now taking just days and we are seeing, in some of the hottest markets, properties going to best and final offers.”
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