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Property Sales Hit New Records

Written by: Liez Comendador

Reviewed by: Fahad Lateef

Updated on July 31, 2021

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The Chancellor of the Exchequer, Rishi Sunak, temporarily lifted stamp duty tax on the initial £500,000 of property buys in July of last year, and in March, he extended the exception by a further three months to the furthest limit of June. The whirlwind of action before changes to stamp tax rules in England, Wales, and Northern Ireland made for the most active month since figures began being published in April 2005.

HMRC said the figures “captured significant impacts from forestalling activity by taxpayers”, with buyers bringing forward transactions to take advantage of government policy.

Last month’s home sales prices were 13.4% higher than they were in June 2020, as per the House Price Index distributed by the Nationwide Building Society, one of Britain’s most significant home loan banks. It is the highest yearly development seen since 2004 and has raised expected costs to nearly £250,000, the Society said. The asking price for British homes rose by 0.7% between mid-June and early July, and the highest increase for a season since 2007 despite the downsizing of a tax cut for purchasers on July 1.

Rightmove, which says it promotes 95% of homes available to be purchased in Britain, said the lopsidedness in the market would probably help the market. The information was gathered between June and July.

“In June, deals hit their most noteworthy month to the UK since practically identical figures were first gathered in April 2005.”

The figure was 216.1% higher than that very month a year before and 108.5% over May this year. One justification is that the huge increment was a race to finish deals before Covid-related stamp duty tax concessions were made less liberal in England and Northern Ireland toward the finish of June. In Wales, a comparative tax reduction was removed. 

“Home loan rates are at record lows.”

With the UK’s biggest structure society, Nationwide, today dispatching the primary sub-1% five-year fixed-rate mortgage, there still are the earmarks of buyers hoping to move to bigger homes.

Iain McKenzie, the Guild of Property Professionals CEO, said: “A lot of last month’s ascent is because of the extremely late scramble to take advantage of the stamp tax duty occasion. However, the occasion hasn’t completely slowed down yet, and we could, in any case, see a blast in regions with lodging estimated under £250,000.”

If you are having problems in understanding the reasons for the price hike, contact us at Legend Financial, because we are always ready to help.

References

Bloomberg. (n.d.). Retrieved from https://www.bloomberg.com/news/features/2021-07-01/world-s-fastest-property-price-surge-since-financial-crisis-sparks-bidding-wars

Stamp Duty Land Tax: temporarily reduced rates. (n.d.). Retrieved from GOV.UK: https://www.gov.uk/guidance/stamp-duty-land-tax-temporary-reduced-rates

U.S. Investors Seek Bargains in U.K. Home-Building Industry. (n.d.). Retrieved from The Wall Street Journal: https://www.wsj.com/articles/u-s-investors-seek-bargains-in-u-k-home-building-industry-11626782400

UK house prices rise again amid record monthly sales. (n.d.). Retrieved from Reuters: https://www.reuters.com/world/uk/uk-house-prices-rise-again-amid-record-monthly-sales-rightmove-2021-07-18/

Author

Fahad Lateef

Fahad is a Chartered Certified Accountant (ACCA), proficient in numeracy and impassioned with giving concise advice to a wide range of clients related to different industries. With an immense experience of over a decade, he has worked as an advisor on different projects run by audit giants like Deloitte and others. He is a firm believer in mutual growth and an established culture of embracing change.
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Reviewed by:

Fahad Lateef

Fahad is a Chartered Certified Accountant (ACCA), proficient in numeracy and impassioned with giving concise advice to a wide range of clients related to different industries. With an immense experience of over a decade, he has worked as an advisor on different projects run by audit giants like Deloitte and others. He is a firm believer in mutual growth and an established culture of embracing change.