Homebuyers race to beat stamp duty holiday deadline as house prices jump £57,000 in lockdown


22 February 2021

  • Homemovers’ stamp duty savings £11,566 on average
  • Average house price increased by £57,790 during the same time
  • First-time buyers in London and South East saving as ‘holiday’ offsets increase in deposit


Homeowners in England and Wales in the race to move home during the stamp duty holiday period are saving on average £11,566 – offsetting the cost of house price increases as a result of the pandemic property market mini-boom.

The average house price for homemovers in the 6 months to June 2020 was £373,537, but this increased by £57,790 during the stamp duty holiday period to £431,327 in the 6 months to Dec 2020. While the threshold for stamp duty was increased to £500,000, based on the average house price for homemovers, this meant in England, only those in London and the South East still had to pay on average £9,848 and £925 respectively. In Wales, where the devolved nation’s rules differ, the average stamp duty paid was £379.

While homemovers saved money on stamp duty, they have faced the challenge of even bigger deposits (on average £11,558) thanks to the increase in house prices during that time.

Those who moved home in London have lower upfront costs of around £12,188, as the amount of deposit increased by an average £2,812 and fully offset by stamp duty holiday savings of £15,000. But this is the only region where the stamp duty savings offset the rise in average house price deposits.

Those moving home in the South East are £7,437 better off, with the growth in average deposit (£7,564) covered by stamp duty savings of £15,001. In West Midlands, the deposit rise of £5,686 has been fully offset by stamp duty savings of £6,225, with £539 to spare.

In the South West, where the average deposit has risen by £9,311, homemovers are £378 up after stamp duty savings of £9,689. Homemovers in all other regions have seen the savings in stamp duty partially offset the increase in average deposit cost.

Andy Bickers, Mortgages Director, Halifax, said: Since the summer we have seen a huge surge in mortgage applications, as people raced to make much sought after stamp duty savings.

“We know that lockdown restrictions have made it more practically challenging for those buying and selling, but the stamp duty ‘holiday’ has been one of the main drivers of continued demand for sales and purchases during the pandemic and we will wait to see if further steps are taken that could give people more time.”

The proportion of homemovers paying stamp duty on transactions dropped from 93% in the six months to June 2020 to 26% in the six months to December, while the threshold was temporarily raised from £125,000 to £500,000.

There was also a significant drop in the number of first-time buyers paying stamp duty holiday – from 29% to 10% in the same period – although these are predominantly concentrated in London and the South East.

During the holiday period, 67% of homemovers in London paid stamp duty on their home purchase, followed by the South East (39%) – down from 100% in both regions. In the South West, 21% of those moving house and 19% in East Anglia paid stamp duty, compared to 98% in both regions prior to the ‘break’ taking effect.

The smallest proportion of homemovers in the North (4%) paid stamp duty – down from 74% pre-holiday, followed by Yorkshire and the Humber – from 84% down to 8% and East Midlands – from 93% to 10%.

Impact on first-time buyers

Before the stamp duty holiday, people buying their first home in London and the South East – where the price tags top the UK average of £266,381 (£480,221 and £310,986 respectively) – paid on average £9,011 in stamp duty, while those in the South East paid £549 in the six months to June 2020.

Those in the capital would have paid more than £712 more (£9,723) in stamp duty and those in the South East would have paid more than double – £1,417 in the six months to Dec 2020 because of an increase in house prices, had the temporary relief measures not been introduced.

While the ‘holiday’ has saved money for those first-time buyers, the increase in house prices in the second half of the year – up £19,858 to £286,239 – has meant that they will need a bigger deposit of around £57,248 to take their first step on the property ladder.

Only first-time buyers in London and the South East are saving money as a result of the stamp duty relief – in London the increase in deposit (£2,848 on average) offset by savings of £9,723 is leaving them £6,875 better off.

In the South East, first-time buyers are on average saving £2,054 as the increase in deposit (£3,471) has been partially offset by the stamp duty holiday savings of £1,417.

Almost four in 10 (38%) of first-time buyers in London paid stamp duty during the second half of 2020 – down from 86% before the holiday period started. Meanwhile in the South East this was down from 42% to 9%, followed by those in East Anglia and South West dropping from 18% and 15% respectively to 3% during the same period.

Proportion of first-time buyers paying stamp duty 2020

FTBs % of FTBs paying stamp duty Jun 2020 >£300k % of FTBs paying stamp duty Dec 2020 >£500k
North 3% 0.5%
Yorkshire and Humberside 4% 0.7%
North West 7% 0.9%
East Midlands 6% 1.3%
West Midlands 10% 1.6%
East Anglia 18% 3.2%
Wales* 25% 12.4%
South West 15% 2.9%
South East 42% 9.2%
Greater London 86% 38.1%
England and Wales 29% 10%

Source: Halifax, 6mth rolling to June, Dec 2020*Note wales based on land transaction thresholds >180K and >250K

Proportion of homemovers paying stamp duty 2020

Homeowners % of Home Movers paying Stamp Duty Jun 2020 >£125k % of Home Movers paying Stamp Duty Dec 2020 >£500k
North 74% 4%
Yorkshire and Humberside 84% 8%
North West 86% 11%
East Midlands 93% 10%
West Midlands 94% 13%
East Anglia 98% 19%
Wales* 56% 43%
South West 98% 21%
South East 100% 39%
Greater London 100% 67%
England and Wales 93% 26%


Source: Halifax, 6mth rolling to June, Dec 2020
*Note wales based on land transaction thresholds >180K and >250K

First-time buyers average house prices and stamp duty 2020

Regions FTB Average House Price
Jun 2020
Stamp Duty Paid Pre SDLT 'Holiday' Rates June 2020 £ FTB Average House Price
Dec 2020
Stamp Duty Paid SDLT 'Holiday' Rates Dec 2020 £ Stamp Duty paid if Pre 'Holiday' rates Dec 2020 £ Average House Price 6mth Growth to Dec 2020 £ Stamp Duty 'Holiday' Savings Dec 2020 £ Average House Price Growth less SDLT Savings £
North

142,333

  -  

150,481

 -  

 -  

8,148

-  

8,148

Yorkshire and Humberside

164,311

 -  

          171,133

 -

-  

  6,823

-  

6,823

North West

            173,154

 -  

         179,516

   - 

-

   6,362

 -

6,362

East Midlands

190,905

 -  

      205,420

-

-

                   14,514

                     -  

14,514

West Midlands

202,158

 -  

      207,636

-

-

  5,478

                     -  

5,478

East Anglia

235,806

 -  

246,039

 --

-

10,233

                     -  

10,233

Wales

160,694

 -  

                     169,169

-

 -  

8,476

                     -  

8,476

South West

 230,138

 -  

          246,290

-  

  -  

16,152

                     -  

16,152

South East

 310,986

                         549

      328,338

-

 1,417

 17,353

                1,417

15,936

Greater London

480,221

                           9,011

                        494,459

-

 9,723

  14,238

               9,723

4,515

England and Wales 266,381    286,239 

19,858

                     -  

19,858

Source: Halifax, 6mth rolling to June, Dec 2020

Homemovers average house price and stamp duty 2020

Regions Homemovers average house price
Jun 2020
Stamp duty paid pre 'holiday' rates June 2020 £ Homemover average house price
Dec 2020
Stamp duty paid during 'Holiday' rates Dec 2020 £ Stamp duty paid if pre 'Holiday' rates applied Dec 2020 £ Average house price 6mth growth to Dec 2020 £ Stamp duty 'Holiday' savings Dec 2020 £ Average house price growth less stamp duty savings £
North

                         213,725            

               1,775

        228,713

                  -  

             2,074

            14,988

           2,074

        12,914

Yorkshire and Humberside

             242,186 

               2,344

        269,463

                   -  

             3,473

            27,277

           3,473

        23,804

North West

        259,390 

               2,970

        290,837

                   -  

             4,542

            31,447

           4,542

        26,905

East Midlands

       271,912 

               3,596

        306,866

                   -  

             5,343

            34,954

           5,343

        29,611

West Midlands

         296,074 

               4,804

        324,505

                   -  

             6,225

            28,431

           6,225

        22,205

East Anglia

         331,856 

               6,593

        376,363

                   -  

             8,818

            44,507

           8,818

        35,689

Wales

         232,490 

               1,837

        257,594

                   379  

             2,830

            25,103

           2,451

        22,652

South West

         347,219 

               7,361

        393,775

                   -  

             9,689

            46,556

           9,689

        36,867

South East

        480,696 

             14,035

        518,518

                 925

           15,926

            37,822

         15,001

        22,821

Greater London

         682,903 

             24,145

        696,961

              9,848

           24,848

            14,059

         15,000

         941

England and Wales

         373,537 

               8,677

        431,327

                   -  

           11,566

            57,790

         11,566

        46,223

Source: Halifax, 6mth rolling to June, Dec 2020