House prices fall for the first time this year
The average UK property price now stands at £260,358, down from £261,642 in May, according to Halifax.
It marked the first monthly decline in house prices since January.
However, on an annual basis, house prices grew by 8.8 per cent and are still £21,000 higher than this time last year following “a broadly unprecedented period of gains”.
The stamp duty holiday, introduced last summer, saw property prices soar as buyers scrambled to take advantage of the tax break. It is now being tapered and will be phased out altogether at the end of September.
Russell Galley, managing director at Halifax, said it was predicted the market might start to lose some steam during the latter half of the year, with the stamp duty holiday ending.
From July 2020, buyers did not have to pay stamp duty on the first £500,000 of their purchase.
Last week, the “nil rate” band was dropped to £250,000 and it will return to the normal £125,000 from 1 October.
However, the tapered approach to the end of the stamp duty holiday means buyers purchasing at the current average price of £260,358 would still only pay around £500 in stamp duty at today’s rates, increasing to around £3,000 when things return to normal from the start of October.
Rob Gill, founder of London-based Altura Mortgage Finance, said: “The momentum generated by the Stamp Duty holiday shows little signs of abating. Having boosted property prices and activity by such extraordinary amounts since its introduction last July, and with a further three months to run at a reduced level, it doesn’t seem like much is going to slow down this runaway train of a property market just yet.”
Rhys Schofield, managing director of Peak Mortgages and Protection, said: “The stampede to buy property in June continued, despite the fact the Stamp Duty deadline was unachievable for most. Supply is still the market’s nemesis, with multiple potential buyers lurking in the wings for every new property hitting the portals, which keeps driving prices upward. Until the supply issue is solved, it’s hard to see the market stop its current run.”