There is no denying the impact of the stamp duty holiday on the UK housing market in the past year. Even though many people have found themselves in an unprecedented financial position, there have been many house moves.
The impact of the pandemic has caused many people to move, but equally, the opportunities afforded by the stamp duty holiday has driven activity that wouldn’t have occurred.
Have you moved home thanks to the stamp duty holiday?
In information provided by Search Acumen, the stamp duty holiday led to an additional 171,000 monthly property transactions, and a 7% growth in property prices.
Their study saw property prices rise 7% between June 2020 and February, an outcome which saw £17,265 added to the price of the average home in England. When you consider the average saving was £2,572; the overall impact of the stamp duty holiday for buyers might not be as appealing as you would hope.
According to research, the current tax holiday saw house prices rise 7% between June 2020 and February 2021, adding £17,265 to the price of the average home in England, more than offsetting the £2,572 savings made on the average property.
Other key findings from the research include:
- An average of 103,724 residential property transactions took place each month across England and the north of Ireland since the introduction of the stamp duty holiday in 2020
- This represents a rise of 22% from the average of 84,691 which is in effect for the 12 months to March 2020
- A total of 171,303 extra property deals, in comparison to pre-covid figures have taken place.
- In the aftermath of the 2008/09 financial crisis, an average of 60,048 property deals took place
- These figures represented a fall of 27% from the previous 12 months average, of 82,378 transactions
- Since the current holiday has been in place, English house prices have risen by 7%, moving from £268,291 to £251,026
- When the holiday occurred in 2008/09, property prices fell 2%, moving from £177,232 to £174,136 in less than a year and a half.
We can help you make your next move
Andy Sommerville, director at Search Acumen, said: “This analysis suggests the property market has been far more responsive to intervention compared to the post-financial crisis holiday. The housing market’s strong performance compared to the wider economy highlights the contrast between the current healthcare crisis and its economic impacts, and the 2008/09 crisis which was rooted in financial markets. While many households have absorbed income hits and face greater job insecurity, the UK’s financial system has held up reasonably well since the onset of COVID.”
Andy continued by saying; “Lenders did pull back from the mortgage market in the early stages of the pandemic, but the flow of credit has gradually picked up as banks got to grips with the crisis. As a result, financing for house purchases has been in reasonably good supply and worked in tandem with the stamp duty holiday to generate a level of activity not seen for a decade, despite the unprecedented challenges of COVID-19. However, giving extra support for buyers has had many challenging consequences, from pushing up house prices and negating the average saving to heaping a heavy workload on time-pressured conveyancers.”
Andy concluded by saying; “Property lawyers have been working around the clock to get people into their homes before the initial 31 March cut off. The conveyancing workload is unlikely to get any lighter given the holiday is now running until June and tapering through to September. In the long term, the industry needs to put conveyancing capacity – not to mention mental wellbeing – at the top of the agenda given the pressure law firms have been under to ensure clients complete on time.”
If you are looking to make a move in the Bromley property market, and you would like to speak with local experts, please get in touch. If you would like to arrange a property valuation, contact us and we will set this up for you. You can phone your BR Estate Agent on 020 3633 8620 from 9am till 9pm seven days a week or visit our website www.br-estateagent.co.uk for more information.