Rising house prices have been a concern of many in the mortgage industry for some time, but the latest figures could ramp up another concern – that of a stamp duty "crisis" taking hold.
These concerns have been further compounded by latest house price statistics revealing that the average UK home is now worth £251,964, an increase of 3.3% over the month and a massive 6.9% on the same time last year – the biggest year-on-year increase since 2007 – according to figures from Rightmove's House Price Index.
This means the typical property has now surpassed the 1% stamp duty threshold to reach the 3% bracket instead, something which could easily add thousands of pounds to the average homebuyer's costs. Additional research from property advisers LCP even found that sellers are having to sell their properties at discounted rates to prevent stamp duty from having a negative impact, and there are calls for chancellor George Osborne to amend these tax thresholds to avert a continuing crisis.
In the meantime, however, moving home is becoming even more expensive, and the increased number of properties on the market doesn't seem to be dampening price rises either. In fact, the data shows that despite new seller numbers being up by 18% on last year (currently averaging 27,768 new listings per month), they're still failing to keep pace with the number of houses coming off the market.
The distinct supply/demand imbalance is continuing to take its toll, and whilst it's good news for sellers, who can typically ask for over £16,000 more than they could a year ago, it isn't so great for those looking to get on the property ladder – or even for those who find themselves unable to sell their home quickly enough.
The key, then, is to be as prepared as possible. With house prices rising it means affordability and choosing the right mortgage is becoming even more important, and having sufficient savings to cover stamp duty and additional moving costs should be at the top of the agenda.
Mortgage rates are still at record low levels so it's a great time to take advantage of them and benefit from low monthly repayments – making sure you've got suitable funds should rates go up, of course – and getting the most from your savings can be achieved with careful comparison.
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