Stamp Duty and Barnet Property Market Update
By Michael Holloway – Director Hunters Estate Agents Barnet
Largest increase in average house prices in almost 20 years
The UK’s largest independent producer of official statistics, the ONS (Office for National Statistics), confirms in their recent report, that the average UK house price jumped by an incredible 15.5% annually in July, the largest increase since May 2003.
15.5% increase in July
The 15.5% increase in July represents almost double the increase recorded in June, where typically property values saw 7.8% increase annually to that date. The ONS noted that this was the highest recorded percentage house price increase in 19 years.
The significant increase in annual house price inflation, according to the ONS report, can principally be attributed to the ‘base effect’ from the falls in house prices recorded at the same time last year, due to the changes in the stamp duty holiday.
Monetary increases
In monetary terms, house prices increased by £6k from June to July this year, this compares to a £13k fall for the same period in the previous year. Nationally, the average house price across the whole of the UK in July 2022 was £292,000, which equates to £39k higher than at the same time in 2021.
In England, the average figure is £314,000, which represents a 16.4% annual increase.
Local house prices
The ONS segments data into regions, locally Barnet falls into the London region. Whilst London as a whole has seen the lowest annual house price growth, where average prices increased by 9.2% over the year to July 2022, up from 6.3% in June 2022. This is not typical of Barnet itself, which has seen significant increases in the 12 month period.
Although despite having the lowest annual house price growth rate, London’s average house prices remain the most expensive of any region in the UK, with a record average price of £544,000 in July 2022.
The outlook
Whilst it’s easy to get carried away with these very positive numbers, the reality is that this increase was a direct result of changes to the stamp duty holiday from the summer of 2021 and almost certainly shouldn’t be seen as a sign of continued significant growth.
The outlook across the property market is uncertain in these challenging times, with rising interest rates and concerns about the increase in the cost of living.
Stamp duty update – Stamp Duty Land Tax (SDLT)
In last Friday’s mini-budget, Chancellor Kwasi Kwarteng, announced the permanent changes to cut stamp duty tax in England and Northern Ireland for some buyers, this change comes into effect straight away.
The amount of stamp duty buyers pay depends on the purchase price of the property. The changes at which stamp duty is paid was doubled from the current £125,000 to £250,000.
The rates are now:
Up to £250,000 – Zero
The next £675,000 (the portion from £250,001 to £925,000) – 5%
The next £575,000 (the portion from £925,001 to £1.5 million) – 10%
The remaining amount (the portion above £1.5 million) – 12%
The chancellor added discounted stamp duty for first-time buyers.
If you’re buying your first home
You can claim a discount (relief) if the property you buy is your first home. This means you’ll pay:
no SDLT up to £425,000
5% SDLT on the portion from £425,001 to £625,000
You’re eligible if you and anyone else you’re buying with are first-time buyers.
Source – Gov.uk
The local market
The local property market in Barnet has seen a more traditional start to the Autumn property market, with an increase of stock coming to the market with sellers looking to move home before the Christmas festivities.
Here is a selection of recently listed properties –
Grasvenor Avenue, Barnet – Guide Price £700,000
Leecroft Road, Barnet – £1,100,000
Hillary Rise, New Barnet – £750,000
Bedford Avenue, Barnet – £795,000
Considering a move this Autumn?
Please feel free to call me if you are considering selling your home in the Barnet area for either an informal conversation about how we might help you with this or to book a market appraisal. You can also use our Instant Online Valuation tool.
Good luck with your house hunting.
Michael Holloway – Hunters of Barnet
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