Homebuyers face 29 per cent stamp duty tax hike in Sheffield as deadline passes
Homebuyers face a 29 per cent stamp duty tax hike in Sheffield as the levy holiday ended on September 30.
Higher house prices as a result of the stamp duty holiday means homebuyers will pay more in stamp duty tax now the reprieve is finally removed, research shows.
House price data and the average cost of stamp duty prior to the holiday’s introduction in July last year was compared to the tax owed on the current purchase of a home.
Figures shows Yorkshire and the Humber had one of the biggest percentage increases in stamp duty costs at 29 per cent - stamp duty was £859 in July 2020 but is now £1,106 – a rise of £248.
In the North East, a £305 jump is a 327 per cent increase, says the research by Birmingham agent Barrows and Forrester.
Managing director James Forrester said: “Much like a Wednesday night out on the town, the stamp duty holiday may have seemed like a great idea for homebuyers when it first launched. However, now that the chance of a saving has all but vanished, many will be left wondering if it was really worthwhile.
“It certainly worked wonders in spurring an uplift in buyer demand but the real legacy of the stamp duty holiday will be ongoing market delays and an even larger hurdle to overcome where the affordability of climbing the ladder is concerned.
“We’ve seen time and time again how these buyer focussed government initiatives lead to higher house prices while failing to address the issue of supply and, in doing so, more and more buyers will fail to realise their aspirations of homeownership.”
The stamp duty hike is part of a double whammy for first-time buyers in Sheffield who were hit by a 15 per cent property price increase due to the stamp duty holiday.
They were paying an average of £144,895 in July 2020 but the figure rose to £166,292 in June this year. This covers the stamp duty holiday when no tax was charged on properties sold at under £500,000.
Figures show an increase of £21,396, which is 14.77 per cent compared to the average rise of 11.7 per cent in England.
This research from estate agent comparison site GetAgent.co.uk shows Yorkshire had the second highest increase in the country. At 16.9 per cent, the North West topped the list.
In local authority areas, first time buyers in the Derbyshire Dales – which covers Bakewell and Matlock – were faced with a rise from £224,190 to £263,692, which is 17.62 per cent.
The highest rise was in Richmondshire, North Yorkshire, where the average price for a first-time buyer was £178,974 in June 2020 but rose to £235,425, an increase of £56,451 or 31.5 per cent.
Experts say the stamp duty holiday heightened demand which pushed house prices to an all-time high and the research by GetAgent shows first-time buyers are now facing an even larger obstacle when it comes to securing homeownership.
Founder and CEO of GetAgent.co.uk Colby Short said: “Although mortgage costs remain very favourable at present, the sheer increase in property values and the deposit required will see many either forced to save for longer, or priced out of the market completely.”