Mortgage strategy Zoopla house prices

ended 05. May 2022

A journalist at Mortgage Strategy is doing a quick news analysis piece for Mortgage Strategy this morning. She wants views  on whether spiralling house prices (as seen in latest Zoopla figures) are going to start to have an impact on purchases? The figures from Zoopla showed that higher prices are pushing more homes into higher stamp duty brackets. Are we going to start to see a slowdown at the top part of the property market at least - is there any evidence of this happening? Or are there more problems at the lower end now first-time buyers have less chance of avoiding stamp duty? Deadline is dead tight - midday.

5 responses from the Newspage community

Star Quote
"There are already signs that when it comes to house prices, the market is begining to slow. The latest Nationwide house price index showed this. Soaring inflation, particularly when it comes to housing costs, together with raising mortgages rates, is beginning to price more and more people out of the market. Whilst demand remains strong and supply remains limited, house prices may continue to rise in some areas but those rises are likely to be much more modest than we have seen during the past two years."
"It's unlikely spiralling house prices will have much of an impact on purchases. Most people simply reduce their deposit to account for any additional stamp duty costs. Robbing Peter to pay Paul is the usual method, and given the increase in prices, home movers already have that additional equity because that was fuelled by the Stamp Duty holiday. It's only fair they put something back in the pot."
"Since Stamp Duty was changed to a graduating tax, as opposed to the previous slab tax calculation, it has been less of a hindrance for buyers. If you're in a fortunate enough position to be buying a £1m house, you know that the Stamp Duty will be a big bill and will likely have the means to pay it. It certainly won't be putting you off. The area I do find stamp duty acting as a brake is people buying where the 3% additional charge for a second home is a factor, but then that's exactly what the charge was designed to do. In my view, any slowdown in the property market is going to start if and when sufficient mortgage funds become unavailable to people, which is something we may see as the increased cost of living figures filter through the ONS data and into lenders' affordability calculators."
The demand for houses will always be there simply due to the lack of supply and lack of incentives for sellers to move or offload empty properties; anyone buying a house that is going to be impacted by stamp duty will always have this factored into their cost of moving the rising costs of homes won't deter the British public getting into to homeownership and most people will simply just adjust deposit amounts if they have the borrowing power to do so.
"At the higher end of the market, we are seeing demand far outweighing supply. We have spoken to a number of people buying above £1m who have said they have been viewing properties that have had multiple offers within a few days. With the way it is at the moment, I don't see prices dropping at this end of the market."