The stamp duty holiday has backfired and buyers almost everywhere are paying more for homes, rather than less.
StripeHomes analysed house price growth since the introduction of the stamp duty holiday in July of last year across 18 major cities in England and how this compares with the saving via the tax reprieve.
The research shows that back in July, the average house price in England was £253,441 meaning the stamp duty saved would have equated to £2,672. Today, the average house price across England sits at £266,532, an increase of £13,091.
While homebuyers are still saving £3,327 in stamp duty due to the extended holiday deadline, they are paying £9,764 more to get on the ladder when compared to July.
“Time and time again, we see poorly thought through Government initiatives designed to ‘help’ homebuyers ironically push house prices further out of reach” says James Forrester, managing director of StripeHomes.
“The stamp duty holiday has done just that and while the average homebuyer might feel as though they’ve been given a helping hand with a few thousand pounds saved in tax, it’s nothing but smoke and mirrors by the Government” he continues.
“The reality is that they’re far worse off due to the heightened levels of house price growth the initiative has caused and with the holiday now running until September for many, we can expect house prices to continue to climb and many more homebuyers to be priced out of homeownership as a result.”
Oxford homebuyers, for example, are even worse off than the average Briton, says StripeHomes. Since the introduction of the stamp duty holiday, prices have jumped by £40,972 to £442,448. Even with a stamp duty saving of £12,122, homebuyers in the city are still paying £28,849 more on the average purchase.
In Manchester, homebuyers are paying £21,299 more than prior to the stamp duty holiday even after taking the current saving into account, while in Sheffield the cost of buying is up £18,700.
Other cities where homebuyers are now worse off by more than £10,000 include Leeds (£15,928), Liverpool (£14,596), Bradford (£13,042), Bournemouth (£11,908) and Plymouth (£10,990).
In fact, the research shows that buying now is better for homebuyers in just two major cities.
In Southampton prices have climbed by just £42 since July of last year meaning homebuyers can still save £1,708 in stamp duty.
And in Cambridge, house prices have fallen by £7,349 since the introduction of the stamp duty holiday, meaning with the addition of a £11,853 tax saving, homebuyers are £19,201 better off buying now.