Stamp Duty holiday contributes to 7.5% increase in house prices
ONS Report: The Stamp Duty holiday has contributed 7.5 per cent property price growth Jan 20 – Jan 21
The average price of a house in the UK rose to £249,000 in January 2021, or £17,000 higher compared to January 2020.
“The increases may reflect factors including pent-up demand, some possible changes in housing preference since the pandemic, and a response to the changes made to property transaction taxes across the nations,” the ONS said.
“Changes in the tax paid on housing transactions may have allowed sellers to request higher prices as the buyers’ overall costs are reduced,” it added.The data also showed a preference for detached houses compared to flats. The average price of a detached property rose 8.6 per cent while for flats and maisonettes it was 2.6 per cent.
“The dash for space continues as buyers snap up larger homes, adding upward pressure on prices. The popularity of detached homes has grown since March 2020, now accounting for 28 per cent of all home sales, up from 22 per cent. Flats are at 12 per cent, down from 17 per cent,” said Nitesh Patel, strategic economist at Yorkshire Building Society.
In England, price growth was 7.5 per cent and the average price £267,000, in Wales, it was 9.6 per cent and £179,000, in Scotland the average price rose 6.9 per cent to £164,000, and in Northern Ireland, it was 5.3 per cent and £148,000.
Regionally in England, the highest growth was in the North. This was led by the North West at 12 per cent, then Yorkshire and the Humber with 8.9 per cent, and at 8.5 per cent, the North East.
The lowest growth was 4.7 per cent in the West Midlands, then London at 5.3 per cent, and the South East with 6.4 per cent.
The average price in London remained the highest regionally at £501,000 in January 2021.
“These figures prove that the housing market adapted to operating during the pandemic even in lockdown conditions. Brokers and lenders are handling record levels of activity, while also managing tough lockdown restrictions and a rise in the number of borrowers affected financially by the virus,” said Cloe Atkinson, managing director at Mortgage Engine.
“A large part of this success is down to adoption of technology-driven solutions, from remote viewings to widespread use of automated valuation models. With the support of technology, lenders have been able to provide for customers throughout the pandemic,” Atkinson added.
So will this property price increase continue into 2021? The signs are so far yes. We are seeing trends in buyer searches having a huge impact in the market and demand is high.
People moving out of London is a popular trend, people looking for space to work inside their property on a long term basis and with mortgage rates so low we would expect this to continue.