ECONOMY
House prices dip for first time in five months as stamp duty holiday winds down

House prices have fallen for the first time in five months as the winding down of the stamp duty holiday eases a property-buying frenzy.

The average cost of a home in the UK dipped to £260,358 in June, according to lender Halifax, although this was still £21,000 higher than the same month last year thanks to months of surging prices.

Average prices fell by 0.5pc in June in the first monthly drop since January. Prices are 8.8pc higher than a year ago, down from May’s 9.6pc year-on-year rise, a 14-year high.

The dip in prices coincided with June’s end of the full stamp duty break, which had removed the tax on properties worth up to £500,000. The tax-free threshold fell to £250,000 this month and will revert to £125,000 in September.

UTTOXETER-ENGLAND - MAY 05: A man is seen looking at houses for sale at an estate agents on May 05, 2021 in Uttoxeter, England . (Photo by Nathan Stirk/Getty Images) (Photo by Nathan Stirk/Getty Images)© 2021 Nathan Stirk UTTOXETER-ENGLAND – MAY 05: A man is seen looking at houses for sale at an estate agents on May 05, 2021 in Uttoxeter, England . (Photo by Nathan Stirk/Getty Images) (Photo by Nathan Stirk/Getty Images)

Russell Galley, of Halifax, said: “With the stamp duty holiday now being phased out, it was predicted the market might start to lose some steam entering the latter half of the year.

“It’s unlikely those with mortgages approved in the early months of summer expected to benefit from the maximum tax break, given the time needed to complete transactions.”

The tapering of the stamp duty holiday has cut maximum tax savings from £15,000 to £2,500.

Mr Galley said house price growth was likely to continue slowing towards the end of the year. “Unemployment is expected to edge higher as job support measures unwind, and the peak of buyer demand now likely to have passed,” he added.

STOKE-ON-TRENT, ENGLAND - MARCH 03: A man walks past a street of terraced houses advertising properties To Let on March 03, 2021 in Stoke-on-Trent, England. UK Chancellor, Rishi Sunak, announced the return of 95% mortgages to help first-time buyers. He also announced that house buyers would be exempt from paying stamp duty for a further three months with the scheme ending on 31st June 2021. (Photo by Nathan Stirk/Getty Images)© 2021 Nathan Stirk STOKE-ON-TRENT, ENGLAND – MARCH 03: A man walks past a street of terraced houses advertising properties To Let on March 03, 2021 in Stoke-on-Trent, England. UK Chancellor, Rishi Sunak, announced the return of 95% mortgages to help first-time buyers. He also announced that house buyers would be exempt from paying stamp duty for a further three months with the scheme ending on 31st June 2021. (Photo by Nathan Stirk/Getty Images)

Property website Zoopla predicted 53,500 buyers missed out on the full stamp duty savings last month. However, Anthony Codling, of property website Twindig, said one month of falling house prices had not “bucked the trend”.

“That trend, for now, is still up not down. For some, the easing of lockdown and the prospect of a summer holiday may take some heat out of the housing market, but others will be keen to move before the end of September and cathartically put Covid behind them,” he said.

House prices rose fastest in Wales last month, jumping 12pc on a year ago, while Northern Ireland, the North West, Yorkshire and Humberside and Scotland all recorded double-digit house price gains. The South of England lagged, with house prices up 7pc year-on-year.

Source: Telegraph.co.uk

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