Yahoo Finance Two bed house prices surge as return of Stamp Duty fails to put off buyers
Prices of mid-market homes coming to market have hit record highs, according to Rightmove, but larger homes have seen prices fall as the Stamp Duty holiday tapers off.
Rightmove said the average price of a two bed house had risen by £1,328 ($1,838) in August. Three to four bedroom properties, favoured by people moving up the property ladder, increased by £975.
Overall, the average price of property coming to market fell by 0.3% (£1,076) in August, the first price drop recorded this year.
Average prices were dragged down by a 0.8% (£4,699) drop in the price of four-bedroom-plus houses. Buyers appeared to be put off by the end of the Stamp Duty holiday, which meant purchasers no longer made large savings.
Watch: How much money do I need to buy a house?
Up until the start of July 2021, buyers didn't have to pay any Stamp Duty on the first £500,000 of their purchase price. The duty has now reverted to kicking in above £250,000. The tax relief provided a strong incentive to complete house purchases before the end of June, especially for higher priced properties.
“Lower-priced sectors are much less affected by the withdrawal of most stamp duty incentives and many have housing higher up their summer agenda than usual, as more are holidaying closer to home,” said Rightmove.
Read more: Demand for new UK homes cools but price hike shows 'few signs of wavering'
Rightmove predicted an autumn bounce back in both activity and prices. In the first week of August, individual buyer enquiries to agents were up by 56% on the same period in 2019, and down by just 17% compared to 2020, when an easing of lockdown restrictions lead to frenzied activity.
Available stocks for sale is still at record lows though, with buyer demand "hoovering up" new supply.
“Home-owners who have yet to come to market and address their new housing needs should act soon to get a better chance of a quick sale at a good price and be in their new home before Christmas,” the real estate listing service said.
Rightmove’s analysis shows that the likelihood of sellers finding a buyer remains close to an all-time high.
Many sellers are choosing to have a buyer lined up before looking for a new home to purchase, as this puts them in the best position to snap up a property they like as soon as it hits the market.
Some sellers are even completing their sale and going into temporary rented accommodation before buying.
Nick Barnes, head of research at estate agent Chestertons, said: "August tends to be a quieter month but, in line with Rightmove’s analysis, buyer interest has remained strong and sales in the first half of August were 7% higher than in the corresponding period last year."
Watch: What do stamp duty cuts mean for buyers and house prices?
