Those looking to buy a home could well find themselves paying more stamp duty than a year ago, as average house prices break the £250,000 barrier.
The average asking price for a house in England and Wales is now £251,964, according to new figures from Rightmove. This puts the average house in the 3% stamp duty bracket, adding an extra burden for people trying to get on the property ladder.
Predictably, London has seen prices increase dramatically - the average asking price in the capital is now £541,313 after the biggest year-on-year increase since 2007.
Mike Shipside, director of Rightmove, commented on the findings:
“The shortage of properties on the market and pent up buyer demand is helping to push prices over that £250,000 level. It does mean that moving is more expensive, so as well as higher prices, more buyers are now having to pay additional stamp duty as well.”
In the wake of rising house prices over the last year, there have been calls for the Bank of England to take action to prevent the emergence of a widely debated “housing bubble”, particularly in relation to the dramatic house price increase seen in London. The Bank’s governor, Mark Carney, yesterday admitted that the Bank is powerless to control rapid increases in London’s prime property. Shipside disagrees that any action is needed:
“You get a bubble when people suddenly lose confidence, and that tends to be an economic crisis, and at the moment there doesn’t appear to be anything like that on the horizon.”
Others are calling upon the chancellor George Osborne to make adjustments to the stamp duty tax thresholds in next month’s Budget, to avoid what is being called a “stamp duty crisis”.
The increase in house prices has been partly driven by the government’s Help to Buy scheme, which has been the subject of intense debate since its launch in April last year.