Market Overview
The British housing market that emerged from the initial pandemic lockdown is the strongest in years, fueled by a stamp duty tax holiday, low interest rates, and a collective reassessment of quality of life, brokers said. (On July 19, Britain removed nearly all legal restrictions on social interactions, even as cases numbers continued to increase and Prime Minister Boris Johnson was forced to go into self-isolation after his government’s health secretary tested positive for Covid-19.)
The first six months of 2021 were the busiest for sales transactions ever recorded by Rightmove, a leading property website. The company reported this week that the average asking price of properties coming to market reached a record high of 338,447 British pounds ($466,000) 3in June, the fourth consecutive month of record averages.
“The stamp-duty tax holiday has shaped the market this year more than anything else,†said Tom Bill, head of UK residential research at brokerage Knight Frank.
For roughly the past year, the first 500,000 pounds ($688,000) on a home purchase were exempt from the graduated tax, which ranges from 2 to 12 percent of the purchase price. The “tax holiday†expired June 30, but an extension, with a lower threshold, is ongoing. Mr. Bill said he expected the exemption to have the greatest impact at the lower end of the market, but even affluent buyers rushed to get deals done in prime central London in June, with Knight Frank recording a record number of transactions.
“It set the tempo across all price brackets,†he said.
The average sale price in England was 271,000 British pounds ($373,000) as of May, a 9.7 percent increase over the previous year, according to the latest data from the Office for National Statistics. London had the highest average house price of any region, at 498,000 pounds ($685,000), but the lowest annual price growth, at 5.2 percent.
