Millions of homes pushed into higher stamp duty brackets by rising house prices during pandemic
Average house prices have increased by nearly £30,000 since the pandemic began, Zoopla says
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Your support makes all the difference.More than four million homes have been catapulted into higher stamp duty or equivalent tax brackets during the Covid pandemic due to rising house prices, according to the latest expert analysis.
Some 4.3 million homes have been pushed into a higher bracket in the UK over the past two years, according to the property website Zoopla.
It means prospective buyers end up paying more in taxes to move home, with the average UK house price having increased by around £29,000 to £249,700 since the pandemic began.
Stamp duty applies in England and Northern Ireland. In Wales, the land transaction tax (LTT) has replaced stamp duty and in Scotland the land and buildings transaction tax (LBTT) is applied to property purchases.
Around 1.5 million more properties across Britain are subject to those taxes compared to March 2020, according to Zoopla, with 3.5 million homes in England and Northern Ireland having moved up into a higher stamp duty threshold. A further 815,000 properties have moved over property tax thresholds in Scotland and Wales.
Grainne Gilmore, head of research at Zoopla, said: “Buyer demand has been very strong ever since the end of the first lockdown in 2020 and the start of this year has been no exception.
“This demand, coupled with constrained levels of supply, has put upward pressure on pricing – with the average property now worth an additional £29,000 compared to March 2020.
“This has pushed millions more homes into higher stamp duty brackets, meaning that if they come to market, there is an additional cost for buyers.
“While homeowners who make a move will see the benefit from increased property values when they sell, new entrants to the market will have to find additional finance to fund a move – meaning the reliance on the ‘bank of mum and dad’ is likely to increase among first-time buyers.
“It also highlights the importance of first-time buyers having access to mortgage deals with smaller deposit requirements if they can meet the criteria for all other aspects of a mortgage loan.”
Additional reporting by PA
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