Home buyers face stamp duty of up to 881 per cent higher after Covid-inspired tax holiday
Since the pandemic-inspired stamp duty holiday came to an end, the amount of SD the average homebuyer in England is now required to pay is 84 per cent higher than it was before the tax break was introduced, and some areas have seen this cost increase by as much as 881 per cent, according to new research shared with City PM today.
In June 2020, just before the SDLT holiday was first introduced, the average house price in England was £250,739, with the average cost of stamp duty sitting at £2,537.
However, the introduction of the stamp duty holiday spurred an enormous surge in buyer demand and, with insufficient stock to service this demand, house prices across England climbed 17 per cent between June 2020 and December 2021, when the scheme finally ended.
As a result, those looking to purchase in a post stamp duty holiday property market are doing so at an average price of £293,339. This means the stamp duty payable on their purchase now sits at £4,667 – an increase of 84 per cent compared to prior to the stamp duty holiday, according to research by GetAgent.co.uk.
Biggest increases
The largest pound-and-pence SDLT increases are, naturally, in locations where house prices are the highest.
Homebuyers in London’s Kensington & Chelsea have endured the largest increase of £7,223, closely followed by Islington (£6,168), and the City of Westminster (£5,980), with Hammersmith and Fulham also making the top 10 (£5,210).
It’s not the London market that has seen massive increases in the cost of stamp duty though, with Elmbridge (£5,894), South Hams (£5,867), Cotswold (£4,694), North Devon (£4,324), South Oxfordshire (£4,191) and East Hampshire also ranking amongst some of the largest monetary increases in the country.
In Preston, the average cost of stamp duty was just £33 prior to the start of the holiday and while it still sits at just £322 now, it means homebuyers have seen a huge 881 per cent increase in cost as a result of the scheme.
Darlington (776 per cent), Barnsley (674 per cent), South Tyneside (651 per cent) and Gateshead (578 per cent) have also seen some of the largest increases.
“We now have a comprehensive look at just how house prices were impacted by the stamp duty holiday and while many certainly benefited from the scheme, it’s fair to say that today’s buyers are also considerably worse off as a result,” said Colby Short, founder and CEO of GetAgent.co.uk.
The removal of stamp duty tax led to an overwhelming surge in buyer demand and as a result, both the price of a property and the tax payable on its purchase have climbed considerably.
“For the government, this will be touted as an economic success story during an otherwise uncertain time.”
“However, it’s fair to say that those struggling with the even higher cost of homeownership in today’s market are unlikely to share that sentiment,” Short concluded.
