Research by property purchasing specialist, HBB Solutions, highlighted that the latest government cuts now mean that stamp duty is only payable on property purchases over £250,000.
However, while this change means that the average homebuyer is due to save £2,500, an overheated housing market could erase this benefit within the next month.
HBB Solutions looked at the current rate of house price growth over the last year, with the figures showing a 16.4% annual increase or an average growth rate of 1.4% per month.
With the current average house price across England sitting at £311,583 currently, this monthly rate of growth equates to a house price jump of £4,251 per month.
As a result, while homebuyers will still see a stamp duty saving when purchasing, the current benefit of this saving in today’s market will have been wiped out in a single month. In fact, even when taking the £2,500 saving into account, homebuyers will still be paying a further £1,751 on top compared to the current cost of purchasing a property.
There are currently five regions where homebuyers stand to make the maximum stamp duty saving as a result of last week’s cut – London, the East of England, the South East, South West and West Midlands.
However, based on the individual average rates of house price growth over the last year across each region, all five are due to see the cost of a home increase by more than £2,500 in a single month – London (£4,145), the East of England (£4,773), the South East (£5,256), South West (£5,697) and West Midlands (£2,794).
While the stamp duty saving for the average homebuyer is lower across the remaining four regions of England, house prices across all four have still climbed by thousands of pounds a month over the last 12 months, which would see the current SDLT saving on offer cancelled out within a month’s time.
Chris Hodgkinson, Managing Director of HBB Solutions said, “Those lucky enough to be in a position to buy a property will, of course, welcome today’s news and the savings being handed down to them.
“However, the market is already overheating at an alarming rate and the reality is that the home they are currently in a position to buy will cost them thousands of pounds more by this time next month.
“So while they will still save on the cost of stamp duty when they do buy, the price they will be paying upfront will have consumed this saving and then some.
“Proof, if it were ever needed, that demand focussed housing initiatives do little more than grab headlines, at the detriment of the nation’s hard-pressed homebuyers.”