UK property prices hit record high after cut in transaction tax

Published (HKT): 2021.04.19 21:45

United Kingdom home prices hit a record high following the government’s efforts to boost real estate transactions by suspending stamp duty levied on sales.

Average house prices rose 2.1% in April to 327,797 pounds (US$455,492), as signs that the months-long national lockdown due to the COVID-19 pandemic was set to ease.

The jump was the second-biggest monthly increase in the past five years, according to real estate website Rightmove. Properties just outside London were the most sought-after, the website added.

Data from the research firm LonRes also showed that real estate transactions in the capital had surged, with sales in the first three months of this year at their highest since 2016. The rise was most likely due to buyers wanting to get in ahead of any rise in interest rates or a government move to reinstate stamp duty, it said.

The upward trend in property prices had extended from coastal fringes to rural areas further inland, said Tim Bannister, Rightmove’s director of property data.

The government in March extended the stamp duty holiday to the end of June this year to ensure buyers were not caught in the so-called completion trap — an often lengthy period of time to complete sales formalities that have been made longer due to the lockdown.

The property purchase tax has been suspended for the first 500,000 pounds on sales in England and Northern Ireland since July last year. The holiday was credited with the robust rise in prices and sales volumes through 2020.

Since the U.K. in January introduced a so-called lifeboat program to those Hongkongers who are entitled to hold a British National (Overseas) passport as a pathway for them to gain citizenship, the number of people applying to settle in the U.K. has continued to rise. A total of 35,000 people have already applied for the program, with an average of more than 3,000 applications now being made weekly.

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