Anthony Codling, CEO of Twindig provides an overview of the housing market and discusses the impact of the stamp duty holiday on property transactions.
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We had the latest data out earlier this week from Nationwide. As you can see (fig.1), their annual house price inflation was 6.4% with a slight marginal dip in January at just 0.3%. The trend from June has been up, up, up.
It's no surprise that all the major house price indices are saying the same thing (fig.2). So these are the three ones we follow very closely. The land registry is the most accurate of all the entities, but the price of that accuracy is that it takes longer to get the data out. And we look at the Halifax and the Nationwide statistics too - the biggest lenders across the country.
Now it would be no surprise to you that house price inflation started to accelerate broadly at the same time as the stamp duty holiday began (fig.3).
I've been amazed, especially in the face of a global pandemic. If you think the last big market shock we had which was the global financial crisis 2007-2009, we saw house prices fall 20%. Here, we've seen house prices up almost 10% since the start of the pandemic.
This is how much house prices have gone up in each region across the country in terms of thousands's of pounds (fig. 3). There is no surprises that London is up the most, but everywhere is up significantly across the country.
And if we look at the maximum stamp duty saving at the £15,000 pound mark, it looks like it's just London in the southeast where the real benefits are seen with England overall just over the £15,000 house price increase.
The newspapers will often talk about this, and I think that it's a false statistic, because what we actually need to look at is how much stamp duty people are actually saving.
If we look at the average house prices in each region, you see that stamp duty saving (the orange bar on the chart), outside of London, it's nowhere close to the £15,000 maximum.
And in most places, England overall, the average savings is about £2,500, just under about 1% of the purchase price.
In the below diagram you will notice that the blue bars are much bigger than the orange bars. So this shows how much more house prices have gone up than the stamp duty savings.
Even in the smallest gains in the East of England, house prices have gone up more than £5,000 more, than the stamp duty saving.
So what this graph is showing you (fig.5) is this is how much buyers are worse off because of the stamp duty holiday.
So in inner London, the prices have gone up more than £25,000, even taking into account £15,000 pounds saving.
So I do question when people say that the stamp duty is bad is bad for homebuyers, because they're paying significantly more than the stamp duty savings that they're able to make, if they're able to complete by the 31st of March.
Anthony Codling is twindig’s CEO and Founder. Formerly a housing market analyst for City institutions including JP Morgan Cazenove, Oriel Securities and Jefferies, he’s a leading authority on the UK property market. He founded twindig because his research revealed that households, homeowners and homebuyers increasingly want all the information they need to buy, manage and sell their home in one place. Some call it a property logbook, others a LinkedIn profile for your home, he calls that place a twindig, a digital twin of your home. You can claim your free twindig by registering your home on twindig.com