Record high for UK house prices despite the pandemic

According to the Office of National Statistics (ONS), UK average house prices have increased by 8.6% over the year to February 2021; the highest annual growth rate the UK has seen since October 2014.

At this year’s Spring Budget the Chancellor, Rishi Sunak announced that the Government would be extending the Stamp Duty Land Tax (SDLT) holiday as a Coronavirus support measure. The threshold for charging SDLT on residential property in England is temporarily raised to £500,000 until 30 June 2021. For transactions between 1 July and 30 September 2021 the threshold will be £250,000. It will then revert to the normal level of £125,000 from 1 October, and the normal 2% charge will apply between £125,000 and £250,000.

As a consequence, more buyers have been rushing to buy a property due to a “fear of missing out” before the 30 June deadline, causing a surge in prices.

House sales have doubled year on year

Consumer magazine Which says provisional data from HM Revenue and Customs (HMRC) shows that 190,980 sales went through in March 2021 after the tax cuts. This is almost double the number recorded a year earlier and 32% more than in February 2021.

Experts predict that when the government’s Coronavirus financial support schemes and the Stamp Duty Land Tax holiday extension come to an end, there could well be a slump and that the house price growth might slow down. But for now, buyer’s demand has bought a surge of properties onto the market and thanks to the extension of the SDLT Holiday, this is a trend that may be staying for a while longer.

For more information on SDLT please get in touch with a member of our property tax team on 01903 234094.