This March saw the prices of residential properties rising at the fastest rate since just before 2007’s financial crisis, with the average price of a home in the United Kingdom increasing by 10.2% in the year up until March. The stamp duty holiday introduced by the Government certainly played a part in this development. Having been introduced to encourage people to move home after the first COVID-19 lockdown in 2020, it seems to be doing its job. The threshold at which stamp duty, the tax paid when purchasing a property at a percentage of the property price, is due, was temporarily raised to £500,000 in England and Northern Ireland and £250,000 in Scotland and Wales. With that holiday coming to an end on the 1st of July, many would be buyers are rushing to take advantage of the tax break that could save them up to £15,000.
The growth rate of 10.2% in March is up from 9.2% in February and, according to the Office for National Statistics, is the highest annual growth rate the UK has seen since August 2007. The average property price in the UK, as of March, was £256,000 which is a year on year increase of £24,000. In addition, according to the ONS, the average price of detached properties actually rose by 11.7% in that time period, whereas flats and maisonettes rose by a smaller but still significant 5%.
These percentages can be seen in real terms in the soaring demand experienced by estate agents. Chief Executive Officer, Vic Darvey of online estate agent Purplebricks, believes that the market will remain buoyant beyond the tax break, stating, “I do not think it [the housing market situation] will change materially. If you look at where we are today and what the market is forecasting, the likes of Rightmove and Zoopla are forecasting as many properties to come to the market this year as last year. We think that the market is in a strong position and will continue to be.” So the future still appears bright, with Darvey adding that “the Government’s recent mortgage guarantee scheme is also going to help.”
Purplebricks has reported that over 60,000 customers downloaded their app in the third quarter of 2020, for reference, that is a 300% increase on the same period in 2019. The company saw a 12% lift in its instruction numbers in the year up to May, and even paid back £1million in furlough relief cash, thanks to their strong performance.