Average UK house prices now stand at £267,587 after surging by 1.7% in September following the end of the stamp duty holiday, according to this morning's data from Halifax. Wales continues to record the strongest house price inflation of any UK region or nation, with annual growth of 11.5% in September and has an average house price of £194,286. In June 2020, the month before the stamp duty holiday began, the typical standardised price for a UK property was £239,317. Therefore a home-mover would have faced SDLT costs of around £2,300. From July last year, the zero rate introduced on homes valued up to £500,000 (falling to £250,000 between July and September this year as the holiday was tapered out) meant no stamp duty would be payable on that same property. By September 2021, average house prices were some £28,270 higher – more than 12 times greater than that initial saving. Today, with the tax break over, home-movers face a bill of nearly £3,400 for the same property, as with an average price of £267,587, they’ve also now been pushed into a higher SDLT bracket (tax rate of 5% applies between £250,000 to £925,000).
Approvals for house purchases ticked down in August to 74,500 from 75,100 in July, according to the latest Money and Credit statistics from the Bank of England. This is the lowest since July 2020, but remains above pre-February 2020 levels. Approvals for remortgaging with a different lender rose to 39,700 in August. This remains low compared to the months running up to February 2020, but is the highest since March 2020.
While the end of the stamp duty holiday will cause seasonal patterns will re-establish themselves, "demand remains high and supply stubbornly tight" suggesting a gradual process of normalisation, according to new research. However, its data shows that the second homes boom that began after the first lockdown in 2020 isn’t over and more buyers than ever have opted for the attractions of a second home, motivated by a series of lockdowns.
The Treasury has received £12.3bn in stamp duty revenue from the beginning of the stamp duty holiday in July 2020 up to August 2021, according to analysis of HMRC receipts. The final phase of the stamp duty holiday – with the threshold having being decreased from £500,000 to £250,000 on 30th June – is due to end on 30th September. Stamp duty receipts for August were £910m, taking the total receipts for the first eight months of the year to £7.6bn.
A strong performance in the housing market saw UK private property wealth increase from £4.21 trillion at the end of H1 2020 to an unprecedented £4.87tn at the end of H1 2021, according to figures from the Equity Release Council. UK mortgage capital repayments have increased by 20% year-on-year, bringing the total amount of debt repaid in the first half of 2021 to an unprecedented £38bn – equivalent to £200m a day or £3,500 for every mortgaged household.