U.K. House Prices Soar to Record High by Stamp Duty Holiday
The average house price in the U.K. soared to a new high in May, as buyers rushed to take advantage of the stamp duty holiday before it expires at the end of June, according to the Halifax House Price Index. The average house price across the U.K. reached £261,743 (US$371,366) last month, the highest level on record, according to the index released on 7th June. The annual growth rate, at 9.5%, was the fastest in nearly seven years. It means the average U.K. home has appreciated more than £22,000 in value over the past 12 months, Halifax managing director Russell Galley said in the report. “Heading into the traditionally busy summer period, market activity continues to be boosted by the government’s stamp duty holiday, with prospective buyers racing to complete purchases in time to benefit from the maximum tax break ahead of June’s deadline,” Galley said. The U.K. government lifted the stamp duty on the first £500,000 of property purchase price for a maximum savings of £15,000. The so-called stamp duty holiday was extended to June 30 from the original expiration date of March 31. A shortage of supply also contributed to the record high prices, Tom Bill, head of U.K. residential research at Knight Frank, said in a statement. “House prices have been driven higher by a supply squeeze as the U.K. comes out of the pandemic, an effect seen in other sectors of the economy,” he said. “More supply is starting to come through, which will redress the balance. We therefore expect U.K. house price growth to slow down after the summer, declining to mid-single digits by the end of 2021.”
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