Will House Prices Go Down?
By Ellis Ranger
Over the last 18 months, the pandemic has run riot, leaving us locked inside our homes through multiple lockdowns. But will house prices go down now we’re living in a more familiar way of life?
During these strange and uncertain times, people in the UK began to think about what they wanted in a home. Did they want to upsize, downsize or move from a busy city centre to a home by the coast? Or did they simply want to leave the past behind to start a new beginning?
In our guide for both buyers and sellers alike, we answer those all-important property market questions:
Has there really been a ‘stamp duty explosion’ following the introduction of the tax break?
Yes. The stamp duty holiday saw the housing market become the most active it has been since records began, but what did this mean for house prices? House prices all over the country have been climbing every year and for the most part the trend has continued. As of June 2021, the average house price within the U.K has increased by 4.7%. A huge contributing factor to the rising prices of homes came from the government’s stamp duty holiday. Up until recently, buyers didn’t have to pay the tax on properties worth up to £500,000.
Why was the stamp duty holiday introduced in the first place?
The stamp duty holiday was introduced in an attempt to keep the housing market turning over. It meant that access to the housing ladder was opened for new buyers, as well as allowing current homeowners to sell and buy tax-free. Buyers could increase their budgets and sellers took advantage of the mayhem by increasing the price of their property. This was because people were willing to pay that bit extra so they could save a lot in external fees. And removal firms like CBS Removals have been in high demand. And there still are some opportunities to save money on homes.
Whereabouts are house prices going down?
The market is arguably beginning to stabilise and despite some changes to the stamp duty holiday, house prices don’t always increase. In fact, it’s the opposite in some places. Leicestershire has seen an overall decrease in house prices by 2.5% from this time last year. Sellers in the LE14 postcode of Melton in particular have slashed prices by as much as 3% which has helped to secure sales. Buyers have been able to typically save between £4,000 and £14,000. The dropping of asking prices coincided with the stamp duty changes which now means buyers only avoid stamp duty on properties worth up to £250,000. However, people who agreed a sale prior to June 1st took advantage of the original £500,000 exemption.
And are prices actually going up in some places?
By and large the housing market has done well to maintain price increases across the UK, with areas such as London and Cambridge up 2.5% and 3% respectively from last year. And those prices will continue to creep up. Typically, you won’t get much change out of half a million pounds for a property in Cambridge although flats do cost considerably less. And in the capital, getting a house could very easily set you back £1 million. Buying a flat, again, works out much cheaper. But the area that has experienced the sharpest price growth is Cornwall, with Padstow and Newquay popular choices for buyers. With seaside homes being highly sought after during the pandemic, property prices in these areas has risen by 20%.
What does this tell us?
Overall, the prices of houses is continuing to rise across the whole of the UK and this is said to be the quickest rate since 2004. However there are signs that certain areas will soon become cheaper to live in, which is good news for newcomers to the property market. In the north, property tends to be cheaper anyway and in a recent blog, we found out what £250,000 buys you. In our latest CBS Sounds podcast, expert Paul Blake gave his market predictions for the rest of the year and you can listen to the latest episode in full here.
If you are looking to move home and need some help, look no further than CBS Removals. We are a firm that goes the distance. You can get a quote by calling 01480 220434 or emailing email@example.com.