As the anticipation builds around the upcoming Autumn Statement and gossip of yet another stamp duty initiative circulates, recent research by GetAgent.co.uk delves into the aftermath of the previous stamp duty holiday on the property market across England.
With the current real estate landscape grappling with reduced buyer demand and sluggish house price growth, the potential for a stamp duty amendment looms large.
The annual rate of house price growth has slowed to a mere 0.8%, a stark contrast to the robust 11.4% seen in September 2021 when the previous stamp duty holiday concluded. Higher borrowing costs have stifled buyer demand, prompting discussions about the government's next move to revitalize the market.
GetAgent's research, spanning from July 2020 to September 2021, unveils a significant boost during the stamp duty holiday. The average house price across England surged by an impressive 13.3%, compared to a mere 2.5% in the period before the holiday. This acceleration in house price growth, amounting to 10.8%, underscores the impact of the stamp duty incentive.
Every region in England experienced heightened house price growth during the holiday, with the North East leading the charge at an 18.4% increase. Even London, with the lowest rate of growth at 5.2%, witnessed a 3% rise compared to the pre-holiday period. At the local level, areas like Hastings saw a remarkable 22.8% surge in house prices during the stamp duty holiday.
Market activity also witnessed a significant upswing, with nearly 1.2 million homes sold during the entirety of the stamp duty holiday, marking a 30% increase compared to the prior period. The South East, London, and the East of England experienced some of the most substantial boosts in market activity, indicating a broader impact across regions.
Colby Short, Co-founder and CEO of GetAgent.co.uk, notes the parallels between the current market conditions and the pandemic's impact. He emphasizes the need for a stimulus to breathe life back into the market, hinting at potential stamp duty incentives in the upcoming Autumn Statement. Short acknowledges that while addressing the housing shortage is crucial for long-term market health, historical data suggests that stamp duty incentives are a reliable short-term solution.
Bridging lenders, already playing a crucial role in property transactions, stand to benefit from increased market activity. As stamp duty incentives stimulate demand, potential buyers may seek bridging loans to fund property transactions. The immediacy and flexibility of this type of finance align with the swift nature of transactions influenced by stamp duty changes, making it a viable solution in a revitalised property market.
In conclusion, the stamp duty incentive has proven to be a potent catalyst for both house price growth and market activity. As the government contemplates its next move in the Autumn Statement, bridging lenders may find themselves in a prime position to facilitate the surge in demand triggered by stamp duty adjustments.
Source: Property Notify