House prices rise over £10,000 in 12 months, driving 1.8m properties into higher stamp duty bracket - following months of accelerated market activity
29th June 2021
Buyer demand eased in the run up to the ending of the initial stamp duty holiday (tomorrow), but there is no sign of a market cliff edge as demand continues to run 55% above levels recorded in 2019
Meanwhile, supply remains down, with total stock of homes available to buy running -24% below average levels last year
Time to sell has almost halved, falling from an average of 42 days in the ‘normal’ market of May 2019 to 22 days in May this year; making this the fastest moving market for five years
Largest share of demand is for properties up to £250,000 - and buyers are able to progress without a stamp duty bill until the end of September
Demand for properties over £250,000 has dipped by a third since April, but remains up 86% compared to average 2019 levels
House price inflation is back up to +4.7% (in line with February) and the highest since the start of 2017 - supported by elevated levels of market activity compared to 2017-19 average
Price growth hits ten year high in Wales (+7.1%), Yorkshire & the Humber (+6.2%), and the North East (+5%)
Accelerated house price growth set to deliver double stamp duty win for the Treasury; as the SDLT holiday tapers, 1.8m properties (total market) move into a higher stamp duty bracket
Tuesday 29th June, 2021, London: UK house prices have increased by an average of £10,246 per property over the past 12 months - the largest rise in value recorded since October 2016. These are the latest insights from Zoopla, the UK’s leading property portal, in its monthly House Price Index.
End of the Stamp duty holiday moderates demand - but no sign of a market cliff edge
UK buyer demand is down 28% from its pandemic-peak, moderated by tomorrow’s stamp duty deadline. That said, demand is still acute and remains 55% higher than the average recorded in the more ‘normal’ market of 2019.
The supply of property listed for sale continues to fail to keep up with demand, with total listings -24% year on year. However, despite the lack of homes for sale, the UK remains on course to register 1.5m sales in 2021.
Supply is being absorbed in part by first-time buyers, who are flocking back to the market (without replenishing supply) to take advantage of their SDLT exemptions that extend beyond the end of June deadline, as well as a wider range of mortgages to choose from.
As the search for space continues, and as homeowners make housing decisions based on newly announced flexible working policies, demand is expected to remain elevated for the remainder of 2021.
More homes subject to higher stamp duty at point of sale
Intense market activity over the last 12 months has accelerated house price growth, pushing 1.8m UK properties into a higher stamp duty bracket. These figures emerge at the same time as stamp duty relief starts to taper, marking a double stamp duty win for the Treasury.
Of all UK homes, 940,000 additional properties will now attract some level of stamp duty at 5% should they sell, and an extra 130,000 will command some level of stamp duty at 10%.
The number of homes in the lower stamp duty bands in England is falling, while price growth means it is rising for the top bands.
The average additional stamp duty payable on homes that have moved up into the 10% stamp duty band will be around £6,100 after the end of the tapered stamp duty holiday in September, while the additional cost for the average home that has moved up into the 5% band will be around £725.
Fastest moving market for five years
Strong buyer appetite has also shaped the time it takes to sell a property - from the point of listing to agreeing a sale. Down from 42 days in May 2019 to 22 days in May 2021, time to sell has almost halved, even though May is typically one of the fastest moving months in the property calendar.
This increase in the pace of a sale reflects how buyers are continuing to make their move regardless of the stamp duty deadline - with the majority of sales agreed in May unlikely to benefit from the larger SDLT relief. This underlines the ‘reassessment of home’, which is fuelling buyer activity, and which has further to run.
Market thrives below SDLT threshold
The largest share of demand is for homes priced up to £250,000, meaning they are stamp duty exempt until the end of September when the tapering period comes to an end.
While buyer demand for properties below £250,000 is down 24% from April’s highs in England, demand levels remain 75% higher than the average recorded in 2019’s ‘normal’ market.
At the same time, demand for properties priced over £250,000 has dipped by a third since April (the last point at which buyers could try to benefit from the maximum SDLT saving), but remains up 86% compared to average 2019 levels.
House price growth in Wales, Yorkshire & the Humber and the North East reaches ten year high
Average house prices rose by 1.1% in the three months to May, taking the annual rate of growth to 4.7%, matching that in February of this year, which was the highest since the start of 2017 - supported by elevated levels of market activity compared to the 2017-19 average.
The spread of price growth continues to widen across the country, with Wales up +7.1%, Yorkshire & the Humber +6.2%, and the North East +5% - marking a ten year high for these regions.
Liverpool (+7.9%) and Manchester (7.2%) continue to register the highest levels of price growth amongst the UK’s largest cities. Meanwhile, some of the most affordable markets are recording the highest house price growth with Rochdale (+9.9%) and Bolton (+8.7%) topping the league.
Hastings (+8.2%) follows in third place; while it doesn’t offer the affordability of its northern counterparts, it is comparatively affordable to its neighbour, Brighton, just down the coast.
Grainne Gilmore, Head of Research, Zoopla, comments: “The stamp duty holiday boosted demand in the housing market, yet buyer demand remains elevated despite the initial holiday ending - signalling that the once-in-a-generation ‘reassessment of home’ has further to run this year.
“Demand may ease further as the reopening of the economy allows people to do more and travel more widely, but at the same time, the confirmation of working practices for office-based workers will lead to more homebuyers being able to push ahead with a move.
“The total stock of homes for sale continues to run well below historical norms, and this will underpin pricing. At the same time, it may also constrain potential activity, especially for buyers looking for family houses. Even so, we forecast that this year will be one of the busiest for the housing market since the global financial crisis - with 1.5 million residential transactions.”
- Ends -
For further information, please contact PR Team on email@example.com or +44 (0)20 3873 8770.
Hello. We're Zoopla. A property website and app.
We know you're not just looking for a place to live. You're looking for a home.
Yeah, we've got over a million properties for you to browse.
Tools that let you filter them in all kinds of clever ways.
And reliable house price estimates, so you can be sure you aren't paying over the odds.
But we know you're looking for more than that.
Because that first flat won't just be a 'great investment opportunity'.
It'll be the feeling of starting out on your own.
That extra bedroom won't just mean another £20K on the re-sale price, it'll mean having your sister over to stay.
And that bungalow won't just be a way to release some equity, it will be a chance to spend more time with the grandkids.
We know that searching for a home is about more than just checking its price, location and features (important as all those things are).
What really matters is how it makes you feel.
We know what a home is really worth.
So let us help you find yours.
Zoopla is part of Zoopla Limited which was founded in 2007.
Zoopla Limited, The Cooperage, 5 Copper Row, London, SE1 2LH
Registered in England and Wales with Company No. 06074771
VAT Registration number: 191 2231 33
Data Protection number: Z9972266