Finance News

Stamp duty savings failing to offset rising deposits: Halifax

Rozi Jones
22nd February 2021
pound coins money scales balance house prices
"Only first-time buyers in London and the South East are saving money as a result of the stamp duty relief"

Home movers are saving an average of £11,566 during the stamp duty holiday, however the average house price has increased by £57,790 during the same time, according to new Halifax data.

The average house price for homemovers in the first half of 2020 was £373,537, but this increased by £57,790 during the stamp duty holiday period to £431,327 in the six months to December.

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.

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.

However, homemovers in all other regions have failed to see the stamp duty savings offset the increase in average deposit cost.

For 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.

Andy Bickers, director of mortgages at 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.”

Related articles
More from Finance News
to our newsletter

Join a community of over 30,000 intermediaries and keep up-to-date with industry news and upcoming events via our newsletter.