House price rises over the last year

From the ONS:

The latest house price data published on GOV.UK by HM Land Registry for May 2021 show that average house prices in the UK increased by 10.0% in the year to May 2021, up from 9.6% in the year to April 2021, representing a continuation of the strong annual growth seen in recent months. Prices in Cornwall have held up very well, as demand has soared.

The latter half of 2020 saw the UK’s average house price growth accelerating. This trend continued into Quarter 1 (Jan to Mar) 2021. After dipping in April, UK average house prices saw a slight monthly increase in the month to May 2021 to £255,000, nearly returning to the record UK average house price seen in March 2021 (£256,000).

On 8 July 2020, the Chancellor of the Exchequer announced a suspension of the tax paid on property purchases with immediate effect. In England, properties up to the value of £500,000 would incur no tax. These changes in the tax paid on housing transactions may have allowed sellers to request higher prices as the buyers’ overall costs are reduced.

As the tax breaks were originally due to conclude at the end of March 2021, it’s likely that this inflated March’s average house prices as buyers rushed to ensure their house purchases were scheduled to complete ahead of this deadline. The monthly property transactions statistics published by HM Revenue and Customs show that the seasonally adjusted number of transactions in March 2021 were estimated to be 183,670, the highest on record, but in April 2021 they fell back to 119,540; a fall of 35%. Transaction numbers then remained at a relatively similar level in May 2021 (114,940).

On the 3 March 2021, the Chancellor of the Exchequer announced an extension to the Stamp Duty holiday. This meant that the tax holiday was extended until 30 June 2021 after which the threshold will decrease to £250,000 until 30 September 2021. From the 1 October 2021, the Stamp Duty thresholds will revert to what they were before 8 July 2020.

Bear in mind, we are talking averages.  Right Move explained the position in Cornwall and Devon:

Properties in Cornwall had an overall average price of £321,423 over the last year, making them pretty expensive for many people.

The majority of sales in Cornwall during the last year were detached properties, selling for an average price of £436,226. Terraced properties sold for an average of £231,373, with semi-detached properties fetching £254,806.

Overall, sold prices in Cornwall over the last year were 16% up on the previous year and 22% up on the 2018 peak of £263,012.

The most expensive area within Cornwall was St. Mawes (£1,186,310) and the cheapest was Torpoint (£183,543).

Most of the sales in Devon over the past year were detached properties which on average sold for £440,702. Terraced properties had an average sold price of £228,354 and semi-detached properties averaged at £269,818.

Devon, with an overall average price of £305,185, was similar in terms of sold prices to nearby Cornwall (£317,622), but was cheaper than Somerset (£334,058) and Dorset (£377,899). The most expensive area within Devon was Dittisham (£1,051,818) and the cheapest was Devonport (£146,747).

In the past year, house prices in Devon were 13% up on the year before and 16% up on 2018 when they averaged at £264,205.

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