The Chancellor has announced that stamp duty is to be abolished for all first time buyers on properties bought up to £300,000, effective from today. In addition, first time buyers purchasing properties up to £500,000 will pay no stamp duty on the first £300,000.
In his Budget, Philip Hammond announced that 80% of first time buyers would pay no stamp duty at all. With 358,000 first time buyers in the last year, this means that at least 24% of all sales in the UK’s housing market are set to be charged 0% tax. Once other exempt sales under £125,000 are taken into account, this figure will be even higher.
Two thirds of properties bought so far this year across the country have been under the new threshold but there are large regional variations. In Wales and the North East, over 90% of sales in the last year have been over £300,000 while just 17% of sales in London were for less than £300,000.
While good news for first-time buyers, this will further squeeze investors in the sub-£500,000 market who are already suffering from increased taxes. What's more, it does not, give any encouragement to owners higher up the chain to downsize.
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LAND REGISTRY DATA: MARCH 2016 (released 28 April 2016)
The March 2016 Land Registry data showed a fall in average house prices across England and Wales for the second month in a row with a drop of minus 0.5 per cent. Regionally, while London and the East saw prices rise by 0.2 per cent over the monthly period, all other regions experienced falls ranging from minus 0.1 per cent in the North West to minus 2.6 per cent in Yorkshire & the Humber.
On an annual basis, house prices have risen by 6.7 per cent across England and Wales, bringing the average house price to £189,901. London saw the highest annual increase in prices at 13.9 per cent and the average house price in the capital now stands at £534,785. The East and the South East also saw an annual rise in double figures at 10.7 and 10.3 per cent respectively, while the North East saw a fall of minus 0.7 per cent. In terms of property type, flats and maisonettes showed the highest annual increase at 7.5 per cent and the lowest increase was seen in semi-detached properties at 6.1 per cent.
By county and unitary authority, the strongest monthly growth was experienced in Slough with an increase of 3.1 per cent, while the most significant monthly drop occurred in Redcar & Cleveland at minus 3.5 per cent. In total, 33 counties and unitary authorities showed a fall in prices over the month. On an annual basis, Slough also had the greatest increase in prices with a movement of 22.1 per cent, while ten counties and unitary authorities experienced a fall, the greatest being Neath Port Talbot at minus 4.3 per cent.
Of the 36 metropolitan districts, Sunderland saw the highest monthly price increase at 1.6 per cent, while 22 districts experienced a fall, the greatest being Liverpool and St Helens each with a movement of minus 1.7 per cent. Coventry saw the largest annual price increase at 8.5 per cent, while three districts experienced a fall, the greatest being North Tyneside at minus 2.3 per cent.
Of the London boroughs, Brent showed the highest monthly price increase at 2.8 per cent, while Hammersmith & Fulham saw the greatest monthly fall at minus 1.3 per cent. Lewisham had the highest annual price rise at 19.9 per cent, while Kensington & Chelsea experienced the smallest annual increase at 4.2 per cent.
The volume of properties sold in January 2016 was 5 per cent lower than a year earlier in England and Wales and 14 per cent lower in London. Over the same period, the number of properties sold for more than £1 million across England and Wales as a whole and in London rose by 2 per cent.
Month on month, the total number of properties sold across England and Wales fell from 73,326 in December 2015 to 54,254 in January 2016 – a drop of 26 per cent. However, the number of property transactions from October 2015 to January 2016 averaged 74,374 per month, compared to 73,744 over the same period a year earlier.
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