How Is The Market Faring With Stamp Duty Holiday Tapering Off?
The stamp duty holiday ignited the housing market, so it will be no surprise if things slow down with the scheme tapering off. However, there is still plenty of life left in the property market.
At Prestige & Village, we work closely with clients across many parts of the country. This ensures we have a good understanding of what goes on in the market. We also stay in touch with the latest studies and research, which ensures you make an informed decision.
The key takeaways from the recent Nationwide figures are:
- Annual house price growth remained in double digits, but fell back to 10.5%
- Prices down 0.5% month-on-month
- Stamp duty changes impacting market dynamics
Robert Gardner, Nationwide’s Chief Economist, said; “Annual house price growth slowed to 10.5% in July, from the 17-year high of 13.4% recorded the previous month. In month-on-month terms, house prices fell by 0.5%, after taking account of seasonal effects, following a 0.7% rise in June. The modest fallback in July was unsurprising given the significant gains recorded in recent months. Indeed, house prices increased by an average of 1.6% a month over the April to June period – more than six times the average monthly gain recorded in the five years before the pandemic.”
Stamp duty holiday tapering off will impact housing market
Robert continued by saying; “The tapering of stamp duty relief in England is also likely to have taken some of the heat out of the market. The nil rate band threshold decreased from £500,000 to £250,000 at the end of June (it will revert to £125,000 at the end of September). This provided a strong incentive to complete house purchases before the end of June, especially for higher priced properties. For those purchasing a property above £250,000, the maximum stamp duty saving reduced from £15,000 to £2,500 after the end of June.”
There will be demand in the housing market for some time to come
Charlotte Nixon, mortgage expert at Quilter spoke about the recent changes in the market, saying; “The predicted cooling of the market is finally upon us as prices dropped by a further 0.5% in July although they are coming down from a very high base so still remain inflated. With the stamp duty holiday set to completely go in a matter of weeks this downward trend is likely to continue into the autumn and may drop even further come winter. Dropping infection levels and an economy which is slowly getting back on its feet may help to steady the ship and prices will reduce at a slower pace than originally predicted but we are unlikely to see anything like the same rush to the market like we have this year following the stamp duty holiday announcement.”
Where do you want to stay?
Charlotte continued by saying; “However, that does not mean that demand will completely dry up. People have got a completely different perspective on their working and home lives following the lockdowns and priorities have changed. The draw of big cities is still there but our clients are happy to live a bit further out for added extras like a home office or a garden. The impact of the pandemic is likely to impact our taste in housing for the foreseeable future and previously unloved locations may still see significant increases in price as they become more accessible to white collar workers previously chained to the office.”
At Prestige & Village, we care about our community, and supporting others. We aim to provide you with as much help and assistance as we can. If you have any property or housing questions, please feel free to contact us today.Back to blog