Median house prices in the UK could rise by a further £34,000 over the next 12 months, according to market analysis by property lending experts Octane Capital. Experts believe the price rise will be fueled by cuts in the stamp duty land tax that could further inflate an already heated property market.
Last week, the government announced that it would reform the stamp duty, allowing home buyers to save thousands of dollars when purchasing a home.
Chancellor of the Exchequer Kwasi Kwarteng announced last week that he will double the level at which people start paying stamp duty from £125,000 to £250,000.
They have also increased the level at which first time buyers start paying stamp duty from £300,000 to £425,000.
The new thresholds will reduce stamp duty costs for all homebuyers by up to £2,500, and first-time buyers will be able to access savings of up to £11,250.
Home buyers will pay no stamp duty on the first £250,000 when buying a home, pay five per cent on homes priced between £250,001 and £925,000, 10 per cent on homes between £925,001 sterling and 1.5 million pounds sterling and 12 per cent of homes over 1.5 million pounds sterling.
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The latest stamp duty cut could lead to a similar level of house price growth. In fact, experts estimate a further 10.8 per cent rise over the next 12 months based on past market performance, which equates to a £33,610 rise in median home value.
Certain areas could see a larger increase in prices than others, and homebuyers in the Southeast could experience the largest increase in the cost of purchase over the next year.
Property experts estimated that house prices could rise by £40,268 thanks to the latest stamp duty cut.
The South West and East of England could also see major annual spikes with increases of £37,768 and £35,631 respectively if the latest stamp duty cut results in a similar level of house price growth.
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The London market did not benefit as much from the original stamp duty holiday, but a similar growth rate following the latest cuts could still add £23,570 to the average cost of a home in the capital over the next 12 months.
The Borough of Kensington and Chelsea is estimated to see the biggest improvement in London, with property values averaging almost £109,000 in the coming year.
Outside London, homebuyers in Elmbridge (£72,734), St Albans (£63,076), South Oxfordshire (£60,173), South Hams (£57,067), Mole Valley (£55,192) and Winchester (£55,192). £53,981) could see the cost of purchases increase at larger annual levels after the latest stamp duty cuts.
Director of octane capitalJonathan Samuels, said: “The housing market landscape has become increasingly volatile in recent months, with rising mortgage rates and skyrocketing cost of living adding to the nation’s economic distress.
“But instead of stabilizing the ship, the government has once again chosen to rock the ship with ill-advised initiatives designed to boost demand and drive house prices higher.
“This will, of course, help drive market activity in the short term, however it will also put the dream of home ownership out of reach for many, who simply cannot muster such a hefty mortgage deposit.”
“So while the current government can congratulate itself on a job well done in keeping market sentiment afloat at the moment, the real concern is what comes next and how their successors will deal with the mess they left behind when the market busts. at the seams.”