House prices fall as tax holiday ends

THE average UK house price plunged by around £10,000 between June and July as a full stamp duty holiday ended.

The price was £255,535 in July, according to the Office for National Statistics (ONS) – around £19,000 higher than a year earlier but nearly £10,000 lower than a record of £265,448 in June.

The full discounts available under the stamp duty holiday in England and Northern Ireland ended when the holiday was tapered from the start of July and the “nil rate” band was reduced.

A similar tax holiday in Wales ended on June 30.

The ONS report said: “As the tax breaks were originally due to conclude at the end of March 2021, it is likely that March’s average house prices were slightly inflated as buyers rushed to ensure their house purchases were scheduled to complete ahead of this deadline.

“This effect was then further exaggerated in June 2021, in line with the extension to the holiday on taxes paid on property purchases in England, Wales and Northern Ireland.”

HM Revenue and Customs (HMRC) figures recently showed house sales in July fell to 73,740, following a record 198,420 in June.

In further signs of a slowdown, the Bank of England previously reported 75,200 home buyer mortgages were approved in July, down from 80,300 in June.

From October 1, stamp duty thresholds will revert to normal levels, ending the holiday completely.

Annual house price growth slowed to 8% in July following a 13.1% increase in June, the figures showed.

Average prices increased over the year in England to £271,000 (7% growth), in Wales to £188,000 (11.6%), in Scotland to a record £177,000 (14.6%) and in Northern Ireland to £153,000 (9%).

The North East had the highest annual growth, with average prices increasing by 10.8% in the year to July to reach £145,000. The lowest growth was in London at 2.2%.