Asking prices have fallen for the “first time” in 2021, a major report has revealed.
The finding comes after the Stamp Duty holiday was replaced by a new transitional rate at the end of July.
The research, published by online agents Rightmove, shows that asking prices fell by an average of £1,000 in August – representing the first dip of the year.
It means that the average house in Great Britain is now worth an estimated 337,371.
While “alarming”, Rightmove says it is important to understand the context behind the headline.
According to the report, house prices have only fallen at the top end of the market, while smaller homes and flats have continued to rise in value.
This is because the temporary rate of Stamp Duty made the largest homes affordable – increasing demand significantly. The smallest homes, meanwhile, already benefited from a generous threshold.
Introduced at the start of the coronavirus pandemic, the relief increased the Stamp Duty land Tax (SDLT) threshold to £500,000 – meaning nine out of 10 homebuyers could avoid paying any tax at all.
But the temporary threshold was replaced by a transitional rate of £250,000 from 01 July, meaning demand for the largest homes has now wavered.
The property market is also less buoyant at this time of the year, explains Rightmove, as buyers and sellers traditionally take extended breaks and holidays abroad.
But “record numbers” of people are still seeking to move later in the year, suggesting an “autumn bounce”.
“We predict that there will be an autumn bounce, with more sellers listing properties for sale and strong buyer demand pushing up asking prices,” said the Rightmove report.
“However, the number of properties for sale is still at a record low, with buyer demand hoovering up new supply. We’re seeing more properties selling, and quickly.”
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