Leading mortgage lender the Halifax has blamed the stamp duty wind-down on a drop in house prices last month.
Although house prices have risen 8.8% so far this year and remain up on a quarterly basis by 2.9%, during June it recorded a 0.5% drop, the first fall since January.
The fever pitch inflation seen in May, when house prices were rising by 9.6% year-on-year, appears to be easing as competition among buyers for stamp duty-free properties was at its height.
The average house price is now £260,358.
“With the stamp duty holiday now being phased out, it was predicted the market might start to lose some steam entering the latter half of the year, and it’s unlikely that those with mortgages approved in the early months of summer expected to benefit from the maximum tax break, given the time needed to complete transactions,” says Halifax MD Russell Galley (pictured).
“That said, with the tapered approach, those purchasing at the current average price of £260,358 would still only pay about £500 in stamp duty at today’s rates, increasing to around £3,000 when things return to normal from the start of October.”
So is the housing boom over? Anthony Codling of Twindig says not, adding that: “One month of falling house prices does not buck a trend and that trend, for now, is still up not down.
“For some, the easing of lockdown and the prospect of a summer holiday may take some heat out of the housing market, but others will be keen to move before the end of September and cathartically put COVID behind them.”
Lucy Pendleton (left) of estate agency James Pendleton agrees, saying: “Property supply is still failing to keep up with demand, with some buyers holding off marketing their property because they cannot see anywhere to move to, creating a vicious cycle of low supply and consequently causing intense up-bidding on the most desirable properties.
“Nothing seems to sate buyer demand for larger homes, and even now the Chancellor’s biggest stamp duty discount has been and gone, there is no sign that the withdrawal of those savings has dampened appetites in the frenzied race for property.”
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