The Stamp Duty Holiday hasn’t had much of an impact in Wales
According to Mike Jones, chief risk officer for the Principality Building Society, the government’s stamp duty holiday is only having a modest impact in Wales.
In Wales, the Land Transaction Tax (LTT) concession introduced in July moved the £ 180,000 threshold to a new level of £250,000 until March 31, 2021, with a maximum value of £2,450 for people buying property for this price.
Jones said: “Given the relatively low savings to be made on the LTT tax in Wales, we do not consider the impact of the temporary rate to be as significant as it appears to be on the property market in England.”
“The temporary LTT holiday in Wales does not apply to second homes or buy-to-let properties where an additional 3% fee is paid.”
He spoke after the Principality released its Wales House Price Index.
The index found that house prices increased 3% to £196,165. However, property sales declined by 58% between April and September compared to the same period in 2019.
Jones added: “While it might seem a bit implausible to report price increases during a pandemic, we believe this reflects increased demand after the close of the second quarter.”
“It is also potentially the desire for a lifestyle change for some who during the confinement have realized that it is possible to work from home, avoiding the need to commute to work every day.”
“However, the demand for larger homes with additional space, including outdoor areas, has increased, and with little new supply coming to market, prices have also increased rapidly.”
“In terms of the outlook for the market, the extension of the licensing scheme and the mortgage deferral scheme could, in the short term, help offset the impact of the weakening of economic performance.”
“However, many experts continue to forecast an increase in unemployment in the coming months, and that will inevitably affect consumer confidence and the housing market.”
Detached home prices continue to rise in Wales.
In September, six Welsh local authorities – Bridgend (£ 190,948), Cardiff (£ 247,030), Carmarthenshire (£172,708), Gwynedd (£198,279), Newport (£213,660), and Powys (£222,992) reached a new record price of the average home.
During the third quarter, the area with the largest increase in median home prices was Gwynedd, which increased by 14.6%.
In Gwynedd, the price of detached homes increased from an average of £250,000 during the second quarter of 2020 to £280,000 during the third quarter of 2020. However, this increase in value was assisted by the sale of the detached home with the highest price in the calendar year area at £1.2 million.
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