Stamp duty: Buyers warned to ‘hold off’ until holiday is over as UK house prices surge

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Average UK house prices increased by 8.9 per cent in the year to April, according to the ONS. This is down from the year to March 2021, when they increased by 9.9 per cent. The data found that house prices surged the most in Wales, where they increased by 15.6 per cent to £185,000.

London continued to have the lowest annual growth, with growth of just 3.3 per cent.

The stamp duty holiday, which was first introduced in July 2020, helped create a property boom across the country as Britons brought forward their property plans.

The holiday is due to end for properties worth between £250,000 and £500,000 on June 30.

From June 30 2021, the threshold will drop to £250,000 until September 30 2021.

Stamp duty thresholds will return back to normal levels from October 1 2021.

In light of the latest figures, Ross Counsell, chartered surveyor and director of GoodMove, has warned that buyers should wait “until October” before buying a property.

Mr Counsell said the surge in house prices “isn’t surprising at this point”.

He explained: “According to the latest statistic from ONS, average house prices in the UK have yet again increased by 8.9 per cent, and now stand at an average price of a whopping £265,000.

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“After a year of staggering prices, the continual increase of housing prices isn’t surprising at this point, but demonstrates an ongoing difficult period for anyone looking to buy a property in the UK.

“However, although an increase of 8.9 percent is still high, in March this was 9.9 per cent – so the decline in monthly growth rate last month holds optimism that house prices may begin to decline over the next six months.

“What’s more, the stamp duty deadline comes into force at the end of June, with a staggered return to previous rates until September, so this can foresee a decline in house prices towards the end of the year.

“The stats also showed that for the fifth consecutive month, London continues to be the region with the lowest annual growth at 3.3 percent, whilst the North East accelerates with an annual growth of 16.9 per cent.”

The property expert said the latest figures suggest a shift in buyer behaviour as Britons move away from big cities to more affordable areas.

He added: “These statistics are very telling of a seismic shift in buyer behaviour to move away from big cities up to northern areas where house prices and the cost of living are, on average, significantly cheaper.

“However, for anyone looking to buy a property, it might just be a good time to invest in the Capital.

“For anyone looking to buy a property in the UK, I would advise them to hold off until October – once the stamp duty holiday has finally come to an end.

“Prospective buyers should look to be prepared, know exactly what they want in a property, and be ready to act fast.”

However, Jonathan Hopper, CEO of Garrington Property Finders, said the influence of the stamp duty holiday may be “subsiding”.

Mr Hopper explained: “The desire for more space is being compounded by the fear that house prices could soon rise out of reach.

“With interest rates still at rock-bottom levels – for now – many people have decided that the time to strike has come.

“As a result buyer demand continues to outstrip the supply of homes for sale in many areas, and this is pushing up prices as buyers compete for the most desirable properties.

“But the pace of price growth is starting to ease off as buyers become realistic rather than romantic in what they’re willing to pay.

“Coupled with a gentle improvement in supply as more sellers put their home on the market, this reality check has blown some of the froth off the market.

“Given that annual price rises had hit double-figures in the most in-demand coastal and rural locations, this slight cooling in price inflation is welcome.

“There is still huge momentum and optimism in the market and estate agents are digging in for a very busy summer, but the gravity-defying price rises are starting to ease.”

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