Property Experts claim that UK housing market cools as stamp duty holiday stutters

After announcing a drop in the yearly rate of home inflation, Elite Homes and Property specialists forecast a cooling in Britain's house price bubble. According to Elite Homes and Property, prices increased by 0.4 percent in July, the first month since purchasers in England and Northern Ireland faced a less favourable stamp duty break. However, because prices rose more rapidly a year ago, the annual rate of increase fell from 8.7% to 7.4%, the lowest level since March, according to the bank.

The monthly update on the property supplied by Elite Homes and Property revealed a clear north-south difference, with the smallest yearly price hikes in London, the southeast, and the east of England, and the largest leaps in Wales, the north-west, and Yorkshire and Humberside. House prices have increased sharply in the last year, aided by the chancellor's decision to abolish stamp duty on purchases of up to £500,000 in England and Northern Ireland. At the beginning of July, the tax relief was limited to properties worth up to £250,000, but it will revert to £125,000 in October. Scotland and Wales have already finished their vacation.

Expert at Elite Homes and Property has stated that the increase in July contributed more than £1,000 to the average property price, bringing it to little over £261,000, up £18,500 from a year ago.

“Buyer activity has been historically strong in recent months, with June being the highest month for mortgage completions since 2008.” The ‘race for space' has fueled this, as has the time-limited stamp duty break.

“With the latter now in its last phases (the zero percent rate applies only to the first £250,000 of the purchase price, before reverting to regular rates in October), buyer activity should continue to slow in the following months, and the market may see a more stable period.”

A lack of available houses and low mortgage rates, according to Galley, will assist to keep prices stable in the coming months. By the end of the year, annual home price inflation will have slowed but would still be "far into positive territory," he said.

House prices, as per Elite Homes and Property experts, would continue to increase faster than most people's incomes, thanks to low borrowing costs and limited availability.

“The small slowdown in yearly home price increase is unsurprising given that the boom in prices was directly triggered by measures around the epidemic rather than occurring notwithstanding Covid,” experts explained.

“The temporary stamp duty cut, which was meant to bolster the property market and confidence during the pandemic, as well as lockdown-driven upsizing and a flight to safer assets, boosted home transactions and prices. In addition, interest rates have remained low, which helps to explain why property prices are increasing so much faster than wages: money is cheap and easy to get by.”

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Created on Aug 26th 2021 20:07. Viewed 295 times.

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