All good things must come to an end, and that goes for the stamp duty holiday too.
The holiday was intended by Chancellor Rishi Sunak to be a boost for the housing market during the coronavirus pandemic, scrapping stamp duty on purchases in England and Northern Ireland worth up to £500,000.
While the market did indeed rally, with a significant increase in new buyers following the holiday’s introduction, it did have its drawbacks – namely increasing house prices to such an extent that they were, once again, out of the reach of first-time buyers.
The holiday’s over
House prices continue to rise, but there are signs that the rate of increase is beginning to plateau; prices were up just 0.7 per cent in August, after the holiday threshold was reduced to £250,000.
This follows falling house sales – down by by almost two-thirds in July – as buyers rushed to complete their purchases ahead of the stamp duty holiday deadline.
Following a flurry of activity in June, with 213,370 UK home sales, transactions slumped 62 per cent to 82,110 in July according to HM Revenue and Customs.
All this will bring a slow-down in house price inflation, which we can already begin to see; recent Halifax HPI statistics show inflation has already hit a five-month low of 7.1 per cent.
Into the next year
Without a crystal ball, there’s no way of knowing for definite what the future holds; there are even mutterings of further restrictions over Winter.
However, all the signs are of a return to some sort of normality in relation to demand and we should start to see house prices begin to level off. One great thing to bear in mind is if you are looking to sell your home, now is the perfect time to do so as there’s a strong chance you’ll receive a fantastic price for your property.
While the holiday was, broadly speaking, a positive, the false house price boom it created was unsustainable, pushing the average cost of a home to a predicted £341,492 in November, before the market settles.
This, in turn, created issues for beleaguered first-time buyers, so a return to stability is to be welcomed across the board.