Fewer than one in 10 properties for sale online in England are now exempt from stamp duty, new research has revealed.
The findings by Rightmove reveal just how few homes are available to buy without purchasers being hit by the tax.
It said only 9 per cent of homes for sale on its website have an asking price of £125,000 or below – the threshold below which no stamp duty is paid if the property is being purchased as a main home.
It follows the end of the stamp duty holiday, which was introduced last year to boost the housing market amid the pandemic.
Rightmove said only 9% of homes for sale on its website have an asking price of £125,000 or below
The housing market has been red hot since the Treasury announced that the first £500,000 of a property purchase would be tax-free.
The relief was extended until the end of June, after which it was halved to £250,000. The threshold returned to £125,000 on 1 October.
Rightmove said that the findings apply to England only and exclude first-time buyers.
First-time buyers pay no stamp duty if the home they are buying is £300,000 or less.
They do pay the tax at a rate of 5 per cent on the amount between £300,000 and £500,000.
More than half of homes in England have an asking price of £300,000 or less, and therefore are exempt from stamp duty for first-time buyers, according to Rightmove.
Tim Bannister, of Rightmove, said: ‘Hundreds of thousands of buyers have benefited from stamp duty savings over the last year, which has provided people with an added incentive to move.
‘That being said, we’re still seeing much higher levels of competition for properties in the market, compared to before the pandemic started, so we’re expecting the market to stay busy for the rest of the year, and into next year.
‘It’s important to remember there are still savings to be had, particularly for first-time buyers, so this doesn’t mean the end of savings altogether.’
These stamp duty savings include those that still apply to properties at £125,000 or below, and £300,000 or below for first-time buyers.
| Sep-21 | Jul-20 | Av asking price change | Av asking price change | |
|---|---|---|---|---|
| Wales | £232,440 | £206,900 | £25,540 | 12.3% |
| South West | £353,213 | £320,361 | £32,852 | 10.3% |
| East of England | £395,983 | £362,975 | £33,008 | 9.1% |
| North West | £227,441 | £208,330 | £19,111 | 9.2% |
| Yorkshire and The Humber | £219,116 | £204,050 | £15,066 | 7.4% |
| East Midlands | £264,554 | £238,523 | £26,031 | 10.9% |
| West Midlands | £260,706 | £239,945 | £20,761 | 8.7% |
| South East | £453,551 | £418,795 | £34,756 | 8.3% |
| North East | £165,628 | £157,080 | £8,548 | 5.4% |
| Scotland | £173,417 | £166,322 | £7,095 | 4.3% |
| London | £638,285 | £641,854 | -£3,569 | -0.6% |
| National | £338,462 | £320,265 | £18,197 | 5.7% |
| National, first-time buyers | £209,056 | £199,340 | £9,716 | 4.9% |
| Source: Rightmove |
Rightmove explained that since the stamp duty holidays were announced in July 2020, asking prices in Britain have increased by more than £18,000, the equivalent of 6 per cent. Asking prices have also risen by just under £10,000 for first-time buyers, the equivalent of 5 per cent.
There are now signs that asking prices are beginning to stabilise, but competition among buyers for homes is double that of pre-pandemic levels, it said.
While property inflation slowed in September, house prices continue to rise at a double-digit pace, according to the latest figures from Nationwide Building Society.
It means that £22,613 has been added to the cost of the average home in just a year, with the average price of a home increasing 10 per cent to £248,742.
The building society said that first-time buyers now need to save a massive 113 per cent of their entire annual salary for a typical home deposit.
Nationwide’s chief economist Robert Gardner said: ‘Raising a deposit remains the main barrier for most prospective first-time buyers. A 20 per cent deposit on a typical first-time buyer home is now around 113 per cent of gross income – a record high.’
Nationwide Building Society said that £22,613 has been added to the cost of the average home in just a year, with the average price of a home increasing 10 per cent to £248,742
Estate agents said that while the stamp duty holiday had now ended, buyer demand continues due to low mortgage rates.
Nick Barnes, of estate agents Chestertons, said: ‘Despite the dust slowly settling on the stamp duty holiday, September’s property market showed little sign of slowing down compared to August.
‘Across our 31 offices in London, September viewings were up 29 per cent and portal enquiries up 33 per cent compared to last month as buyers returned from their summer holidays and resumed their normal lives.
‘We expect the market to remain buoyant over the next few months at least as buyers will be keen to finalise their move before Christmas. Buyer demand continues to be supported by a very favourable mortgage market with lenders still keen to secure new business, offering attractive interest rates on mortgages.’