Property: House prices reduce in October before a spike in November as market hots up ahead of stamp duty holiday deadline

09/12/2020

House prices reduced from record highs in October, before a 1.2 per cent increase in November as people look to complete property transactions before the end of the stamp duty holiday in March 2021, according to the latest research.

The property sales site website Rightmove released data tracking asking prices and the increase in demand since the Chancellor announced the stamp duty holiday in July.

The Government’s stamp duty holiday ensures that main residence property transactions of £500,000 or under will pay no stamp duty until 31 March 2021, where previously a £400,000 transaction would have resulted in £10,000 in stamp duty.

Stamp duty for those purchasing additional properties has also been cut, starting at three per cent up to £500,000.

Research conducted by Halifax has indicated that House Prices grew by 1.2 per cent in November, following a 0.6 per cent decrease in October, with buyers trying to complete transactions before the end of the stamp duty.

House prices have also grown by 7.6 per cent year-on-year, with the market recovering positively despite some market indicators stating that activity was cooling off.

Tim Bannister, Director of Property Data at Rightmove, said: “Given the ongoing mini-boom, prices might have been expected to rise again this month.

“But instead we have a slight dip, which could be a result of some new sellers pricing more realistically to have a better chance of agreeing a sale in time to benefit from the stamp duty savings on their onward purchase.”

A study of different price bands has shown a sharper growth in activity higher price bands, with buyers set to make more significant stamp duty savings on transactions, with sales doubling in the £400,000 – £500,000 price band.

For help and advice on taxation matters relating to residential property, including on stamp duty, contact Anne-Maree Dunn, Client Partner and Head of Tax at WMT – Chartered Accountants today.