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How Stamp Duty Is Still Impacting Property Prices This Summer

The Guardian has recently reported that the gap between supply and demand for homes is now at its widest level since 2013.

The report of the market has come from the Royal Institution of Chartered Surveyors (RICS), and showed that new listings couldn’t keep up with the number of interested buyers in May 2021, driving up house prices across the UK.

It went on to say that the stamp duty holiday in parts of the country was one of the factors driving demand. It said that estate agents were reporting increases in the amount of new sales agreed while buyers were trying to beat the start of the phasing out of the tax break at the end of June.

By July, buyers across England and Northern Ireland will have to pay tax on the value of houses above £250k (unless it’s their first home).

However, there was “no sign of house price inflation losing any steam”, RICS said. In fact, two of the UK’s largest lenders, Nationwide and Halifax both reported 10% in annual price increases—and the average UK house price is now £256,000, according to the Office for National Statistics.

“Ending a tax break always has the potential to be a little disruptive for a market, but with the economy performing better than could have been expected even a short while ago,” said Simon Rubinsohn, chief economist at RICS, “and the cost of money still at rock bottom levels, the principal drivers supporting demand will remain in place even after the expiry of the stamp duty holiday.”

Rubinsohn went on to say: “More challenging is the question of supply, a theme coming back strongly from respondents to the survey both with regard to the sales and lettings markets.”

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