UK house prices drop to beat deadline for tax relief

Photographer: Jason Alden / Bloomberg

Home prices in the UK fell in January as sellers tried to speed up deals with discounts before a temporary reduction in a hefty tax on the purchase of a home – though many deals will run out of money. anyway the deadline, depending Rightmove.

The average asking price fell 0.9% on the month, apparently to entice movers to sell at the last minute, the UK’s largest real estate website said. However, out of the 613,000 deals already in the works, he expects around 100,000 to close after the March 31 deadline, which means they will face tax bills until to 15,000 pounds ($ 20,000) more than they would have.

While activity in the first few weeks of January typically sets the tone for the rest of the year, Covid-related market closings and the stamp duty holidays that are boosting the stimulus are likely to skew the numbers in 2021.

Tim Bannister, director of property data at Rightmove, said the main difference between Britain’s first foreclosure last year and the one it is in now was that the housing market was open this time around, so that “new housing priorities can therefore be more easily met”.

As more people work remotely and home-school their children, they have sought homes with more space – indoors and outdoors – lifting the market after the initial shock of the pandemic despite the deepest economic recession. in three centuries. The number of sales agreed last year was up 10 from 2019.

Matthew Smith, director of sales and rentals at Thornley Groves, Manchester, said the desire to move to the suburbs is the main driver of sales.

“I don’t think the high activity levels we’re seeing right now are exclusively due to the tax holiday,” he said. “It just gave people the push to be mindful of the move, which resulted in increased demand.”