The average UK house price dipped by 0.5 per cent last month as the full stamp duty holiday came to an end, research from Halifax revealed today.
After the first monthly price fall since January, the average UK house price hit £260,358 in June.
In real terms, however, UK homes are still priced £21,000 higher than this time last year on average, an annual increase of 8.8 per cent.
The tax break – which temporarily scrapped the levy on property worth less than £500,000 – benefitted 1.3 million buyers in the UK according to Rightmove, but closed on June 30 and is now tapering off.
The starting point at which stamp duty must be paid is now £250,000 and will return to £125,000 when the tapering off period comes to an end in October. First-time buyers will not pay stamp duty on properties priced up to £300,000 as was the case pre-Covid.
“Government support measures over the last year have helped to boost demand, particularly amongst buyers searching for larger family homes at the upper end of the market,” said Russell Galley of Halifax.
The average price of a detached home in the UK has increased by more than 10 per cent - almost £47,000 - over the past year.
“At a cost of over half a million pounds, [detached homes] are now £200,000 more expensive than the typical semi-detached house,” said Galley.
In London, property values were up by 2.9 per cent year-on-year according to today's house price index — with an average house price of £511,234.
London rises have been lagging the rest of the country this year, in part because of a “race for space” that has seen buyers swap city flats for suburban houses with outdoor space and room to create a home office.
Further slowdowns are expected as the stamp duty tapering off period ends and when three million workers come off the furlough scheme in the autumn.
"Prices have been driven by an imbalance between demand and supply for the past year," said Miles Robinson of online mortgage broker Trussle.
"The stamp duty holiday has created record levels of demand for property, as house hunters look to save huge sums in tax. But, this demand has far outstripped the supply of homes coming onto the market, which has slipped to its lowest rate since 2013."