House Prices Hit as Stamp Duty Holiday Ends

In July 2020 the Chancellor announced that the Stamp Duty threshold would increase from £125,000 to £500,000, until 31^st March 2021. He then extended this for a further three months. It was expected that this would reduce the average Stamp Duty bill by around £4,500.

The changes applied to all residential purchases and benefitted all types of buyer.

This Stamp Duty cut along with many other factors as a result of the pandemic caused house prices to rise as more people looked to move. During the lockdowns it was a common trend that people were looking for greener pastures, more living space, or simply wanted a change post-lockdown.

Demand was outstripping supply in many areas leading to house prices rising. Last year across the country house prices rose 8.8% — around an average increase of £21,000.

Now the Stamp Duty holiday has come to an end the market is adjusting slightly. According to Halifax, house prices dropped 0.5% in June.

What’s next for the property market?

It’s important that we recognise that the house price fall in June is only a slight decline and whilst house price growth is starting to stagnate there’s still a lot of demand out there with people still on the lookout for more space or a fresh start. Larger family homes in particular are still well sought after. This level of demand should keep house prices from any dramatic fall.

Borrowing rates on mortgages are also still low, which is likely to continue for some time and will keep prices propped up.

What about external factors?

Of course, the Stamp Duty holiday and people looking to move house weren’t the only factors affecting the economy and therefore the housing market during the pandemic. Chancellor Rishi Sunak’s 2021 Budget was full of measures to help navigate the economy through the pandemic.

There was the 20% uplift in Universal Credit and the furlough scheme which is now coming to an end. As this happens it’s expected that we will see a rise in unemployment and household budgets squeezed. This will likely slow house price growth over the rest of the year.

Are you looking to move?

Probably the most important factor to consider here is that strong demand for all types of property will continue. At E&M we’re agreeing sales on lots of properties very quickly after we list them and in many cases for either above the asking price or for the asking price. You’ve got to move quick to secure your next home, it’s competitive. It’s also a great time to sell your current home for the same reasons.

Have a look at our available properties here and find out all about how we can help you sell your existing property fast.

At E&M we’re a fresh, vibrant estate agency in Burnley here to get you moving. We offer a personalised, premium service at a lower cost than other high street agents. With us, the extra mile is standard.

To find out more, contact our sales team on 01282 711560 or email sales@eandmps.com. Alternatively, read more about us here.