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SDLT cut benefit to be wiped out within a month

Research by property purchasing specialist HBB Solutions has revealed that the current benefit of the government’s latest stamp duty cuts could be wiped out within a month due to the current high rates of upward house price growth.

The latest government cuts now mean that stamp duty is only payable on property purchases over £250,000. But 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, this monthly growth rate 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.

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