Stamp duty deadline prompted 4.5% June house price spike

UK house prices spiked 4.5% in June as sales rushed through to beat the stamp duty cut-off, driving annual house price inflation to 13.2% according to the latest official data.

The Land Registry figures for June, which record completed sales, show that the average price of a home in the UK hit £265,668 in the month, up 4.5% from May alone.

The steep spike was even more pronounced in some regions, with Yorkshire & the Humber seeing prices rise a huge 7.1% in the month, and the North west seeing growth of 6.8%. The monthly rise was lowest in London, where prices increases by just 2.5%.

The increase puts annual house price inflation above 10% for the first time since before the 2008 global financial crisis, with the 13.2% figure the highest for exactly 17 years.

The Land Registry said the spike since the lifting of initial covid lockdown restrictions in late spring last year, buoyed by chancellor Rishi Sunak’s stamp duty cut, meant that prices had now risen over the year by 18.6% in the North west, with rises of 15% or more also seen in the North east, Yorkshire & the Humber, Wales and the West Midlands.

London is the only region of the UK to have seen house price inflation of less than 10% in the last year, the figures suggest, with prices rising by 6.3% in the capital.

The UK rise in prices over the last year has now put on average £30,965 on the price of a house – more than double the value of the maximum £15,000 benefit to be gained from the stamp duty relief brought in by the chancellor.

However, data from mortgage lenders and the RICS covering the period since June suggests the market has cooled since the tapering of the stamp duty relief at the end of that month, with only homes under £250k now benefiting from the cut.

Mortgage lender the Halifax said this month that asking prices had fallen back since peaking in May in the run-up to the stamp duty cut-off.

Iain McKenzie, CEO of The Guild of Property Professionals, said the figures painted “an arresting picture of the frenzy we saw towards the end of the full stamp duty holiday as house prices boomed with buyers rushing to get their key in the lock.”

However, he said: “Despite the winding down of the stamp duty holiday and more people feeling the pressure to return to the office, all the elements are still in place for house prices to remain higher than usual for the foreseeable future.”