Stamp Duty Holiday extension set to lessen drop in house prices through to May.
19 March 2021
By Jeremy Greer
Our House Price Forecast predicts that after the government’s announcement of an extension to the Stamp Duty Holiday, house prices will not fall as sharply as once anticipated.
According to the reallymoving House Price Forecast, prices will continue to fall each month through to May 2021. However, the drop will not be as sharp as originally predicted.
House prices began to fall from January into February, by 2.5%, as fewer people were buying due to the scheduled end of the Stamp Duty holiday in March 2021. We originally predicted that after March there would be a sharp drop in house prices (around 4.1%) due to the return of Stamp Duty.
However, the government announced that the Stamp Duty Holiday, in which Stamp Duty does not have to be paid on properties worth up to £500,000, would be extended until 30th
June. It will then be altered to apply to properties up to £250,000 until the end of October. This is likely to cause demand for housing to pick up, and our predictions changed.
While our forecast still sees average prices going down from February to May, the rate at which they will fall is significantly lower. Dropping by 2.6% from February to march, 3% March to April and finally by 2.4% April into May. Values seem to be falling back in line with where they were the same time in 2020.
Regionally, the forecast still shows that average prices will decrease across the UK across the three months, with the smallest decrease being Yorkshire and Humber, with a predicted price drop of 0.9% from February to May. The largest predicted price drop will be in Northern Ireland, with a predicted average drop of 14.9%.
You can see more information in our February 2021 Forecast
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Dino on 03/05/2021