Stamp duty saving to be wiped out within a month

The stamp duty saving is expected to be wiped out within a single month, according to property purchasing firm HBB Solutions.

The latest government cuts now mean that stamp duty is only payable on property purchases over £250,000.

But while this change means that the average homebuyer is due to save £2,500, an overheated housing market could erase this benefit very quickly.

HBB Solutions looked at the current rate of house price growth over the last year, with the figures showing a 16.4% annual increase, or an average growth rate of 1.4% per month.

With the current average house price across England sitting at £311,583 currently, this monthly rate of growth equates to a house price jump of £4,251 per month.

Chris Hodgkinson, managing director of HBB Solutions, said: “Those lucky enough to be in a position to buy a property will, of course, welcome today’s news and the savings being handed down to them.

“However, the market is already overheating at an alarming rate and the reality is that the home they are currently in a position to buy will cost them thousands of pounds more by this time next month.

“So while they will still save on the cost of stamp duty when they do buy, the price they will be paying upfront will have consumed this saving and then some.

“Proof, if it were ever needed, that demand focussed housing initiatives do little more than grab headlines, at the detriment of the nation’s hard pressed homebuyers.”

There are currently five regions where homebuyers stand to make the maximum stamp duty saving due to last week’s cut - London, the East of England, the South East, South West and West Midlands.

However, based on the individual average rates of house price growth over the last year across each region, all five are due to see the cost of a home increase by more than £2,500 in a single month - London (£4,145), the East of England (£4,773), the South East (£5,256), South West (£5,697) and West Midlands (£2,794).

While the stamp duty saving for the average homebuyer is lower across the remaining four regions of England, house prices across all four have still climbed by thousands of pounds a month over the last 12 months, which would see the current SDLT saving on offer cancelled out within a month’s time.

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