Guild of Landlords House Price Digest – June 2021

Fears of house prices falling off a cliff as the stamp duty holiday ends seem unfounded as the deadline day passes. This is our House Price Digest - June 2021.

However, property experts warn that most house price trackers lag in real-time, and reverse values may still be on the cards. The official data from the Office of National Statistics posts an 8.9 per cent increase in house prices in the year to March 31, 2021 – down from 9.9 per cent growth in February. 

Average house prices in England are now £268,000, £185,000 in Wales and £161,000 in Scotland. At 3.3 per cent London has the slowest house price growth in the country for the fifth month in a row. Since July, house prices have accelerated as Chancellor Rishi Sunak slashed stamp duty rates for buyers and movers. 

Rates remained the same for property investors and second home buyers. The stamp duty holiday ended on June 30, but lower discount rates still apply until September 30.

“These changes in the tax paid on housing transactions may have allowed sellers to request higher prices as buyers' overall costs are reduced,” says the ONS report

“As the tax breaks were originally due to conclude at the end of March 2021, it is likely that this inflated March's average house prices as buyers rushed to ensure their house purchases were scheduled to complete ahead of this deadline.”

The rates from July 1 to September 30 are:

Property or lease premium or transfer valueSDLT rate
Up to £250,000Zero
The next £675,000 (the portion from £250,001 to £925,000)5%
The next £575,000 (the portion from £925,001 to £1.5 million)10%
The remaining amount (the portion above £1.5 million)12%

From October 1, they go back to pre-holiday rates:

Property or lease premium or transfer valueSDLT rate
Up to £125,000Zero
The next £125,000 (the portion from £125,001 to £250,000)2%
The next £675,000 (the portion from £250,001 to £925,000)5%
The next £575,000 (the portion from £925,001 to £1.5 million)10%
The remaining amount (the portion above £1.5 million)12%

Source: HMRC Each country has sets different stamp duty rates – the tables above relate to England. Click here for rates in Wales and here for Scotland.

English house prices by region – April 2021

House prices in the North and Midlands are growing much faster than those in London and the south, and only prices in the southwest buck the trend. In previous booms, this signalled a ripple effect spreading from the capital that saw prices follow the direction of London up to a year or 18 months later. 

Buyers target larger homes

Buyers are looking for larger properties as more people need space to keep working from home, says house price analysis by surveyors e-serv. The house price report echoes the findings of the ONS study, pointing out that prices are falling in London as buyers shun city centre apartments to match their desired new lifestyle.

“Overall, we can see the market continues to enjoy the effect of the government’s stamp duty holiday. Buyers are still striving to complete purchases in time to benefit from the maximum tax break ahead of the change in June to a tapered deadline,” said e-surv director Richard Sexton. 

“Completion prices for transactions funded by both mortgages and cash grew by a startling 13.4% annually in May, and at a national level, prices in England and Wales rose monthly by some £1,800, or 0.5%. However, it is notable that the monthly price increases over the last three months are the lowest since June 2020, probably a reflection of the rapidly approaching end of the stamp duty holiday.”

House price data comparison

These are the figures from the leading five house price indices for May 2021:

Key: A = Annual M = Monthly

House Price Digest June 2021 FAQ

The figures for average house prices and movements in property values can be confusing if you don’t know how to read the data. Here are some of the most asked questions about house price indices.

Why are the average property prices different in each report?

The reports use different data to draw their conclusions and take the data from different periods. The Nationwide and Halifax indices are based on their customer data, which are much smaller samples than the national data analysed by the ONS. Acadata’s methodology includes analysis that no other index uses. Each organisation collects data over different periods – Nationwide and Halifax are for the year to September, while the ONS is to the end of July.

What is the average house price?

There’s no such thing as an average home; the figure is simply math calculated from the total value of all transactions in the sample divided by the number of homes changing hands.

Which house price index is the best?

They are all flawed because of the nature of the restricted data they are based on, but the one with the broadest sample comes from the ONS. However, the ONS data is usually the last to market and out of date by three months on publication.

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