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1.8m homes ‘pushed into higher stamp duty brackets in past year’

·3-min read

Around 1.8 million homes have been pushed into higher stamp duty brackets over the past year, a property website estimates.

On average, UK house prices have increased by £10,246 in the past 12 months, Zoopla said.

Intense market activity has accelerated house price growth, pushing 1.8 million properties into a higher stamp duty bracket, the website added.

The findings were released ahead of the stamp duty holiday being tapered from Thursday.

The “nil rate” stamp duty band, which was temporarily increased to £500,000 in 2020, will halve to £250,000 from July 1. Then, from October 1, it will revert to its normal threshold of £125,000. Stamp duty applies in England and Northern Ireland.

The average time it takes to sell a property has nearly halved, to 22 days in May 2021, compared with 42 days in May 2019, the report said.

It said this shows buyers are continuing to make moves regardless of the stamp duty deadline – with the majority of sales agreed in May unlikely to benefit from the maximum stamp duty holiday discount.

The search for space among home-buyers, as well as increased numbers of first-time buyers and those making lifestyle changes, will continue to support activity through the second half of the year, the report predicted.

Grainne Gilmore, head of research at Zoopla, said: “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 home-buyers 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.”

Estate agents said that, with people having more flexibility around where they work, Wales and Yorkshire are sought-after locations.

Kate Eales, head of regional agency at Strutt & Parker, said: “The Welsh market has seen unprecedented levels of interest, both on the coast and inland, and we have a hotlist of buyers waiting to see property come to the market, with some properties exchanging within 48 hours of receiving offers, and others selling for 25% above guide price.”

Patrick McCutcheon, head of residential, Dacre, Son & Hartley, said: “With rural and village locations in abundance, Yorkshire is certainly attracting movers both within and outside of the region.

“The proportion of prospective buyers from London and the South East who have opted to receive property opportunities has increased to almost 25%, with flexible working enabling more buyers to escape the capital in search of the countryside, without losing half their week to commuting.”

A Treasury spokesman said: “The temporary stamp duty cut is helping to protect hundreds of thousands of jobs which rely on the property market by stimulating house moves.

“Official HMRC figures show it’s working, with transactions up 138% last month compared with June 2020.”

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