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Good signs for housing markets in England and Wales

Tuesday 4th June 2013

The latest statistics released yesterday by HM Land Registry reveals that the average price of a residential property nationwide has reached £234,957, showing a fractional growth since March. However, versus this time last year prices are 5% higher, while transactions have increased by 3% year-on-year.

The most notable increase in sales in England and Wales has been in the £200,000 and £250,000 price band where transactions jumped by 15%.

But with the average price of a home in England and Wales rapidly approaching the £250,000 mark, where Stamp Duty leaps from 1% to 3%, a rise in tax from £2,500 to £7,500, the government needs to urgently re-evaluate this threshold so that the market can operate freely again, according to Naomi Heaton, CEO of London Central Portfolio.

She commented: “When the tax was first introduced it was never intended to be a tax on the ‘every-man’ but now it is seriously impacting on the average home buyer. Since 1997, when stamp duty was increased to 3% for properties over £250,000, average prices have increased by over three times. However, the threshold has never been revised upwards.

“It is time the Chancellor took action to enable people to trade up opening up the market for first time buyers, rather than continuing to line the Exchequers pockets.”

Property price gains over the past year have unsurprisingly been led by prime central London, where the average price reached £1,379,142 in April; up 13% over this time last year, supported by a 60% annual rise in the volume of transactions over £2m.

Some 88 purchases at £2 million+ took place in April of this year, compared with 56 in April 2012, with five sales transacted at above £10 million with the most expensive sale taking place in Bolney Gate, The City of Westminster, SW7 1QW - a terraced house which sold for £18.25 million.

“The stimulus of the low cost of sterling, cheap debt and the Capital’s enduring appeal has fuelled a further influx of international investors. This has led to increased transactions at the top end of the market which is contributing to the upward rise in average prices,” added Heaton.

This month also brings good news for the government as transactions in England and Wales shoot up, increasing 12% in just one month. Perhaps an indication that their flagship property schemes, like Help to Buy and Funding for Lending, have begun to take effect.

              

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