Thrifty Loans

An average London home has now passed £300,000, according to the Halifax. The price of an average home in the capital rose 4.9% in the three months to June, to reach £313,122. The UK’s biggest mortgage lender says this means that the average price is now above the threshold of inheritance tax, and way above the second tier for stamp duty (£250,000), which incurs 3%.

“The typical homebuyer in London and the South East, in particular, faces a rising tax burden due to the government’s continuing failure to increase the inheritance tax and stamp duty thresholds in line with house price inflation,” said Halifax economist Tim Crawford. He called on the government to raise the stamp-duty thresholds and the inheritance-tax threshold in line with past increases in house prices over the past decade. “We believe the government also should commit to index link all property-related tax thresholds to house-price inflation in the future,” he said.

Property prices in London are getting further and further out of the reach of an average homebuyer, and salary rises are not keeping up with such astronomical prices. More people are being pushed out into the commuter belt.

Prices in the housing market are rising fastest in Northern Ireland where they were up 8.5% in the second quarter and the annual rise is now 47%. The boom in the province has been dramatic and outside London and the South East, the region is the most expensive in the UK, rising from its place at second-bottom only two years ago. Eight towns in Northern Ireland now head the list of towns with the fastest rising house prices. In Newtonards the cost of buying a home has rocketed by 64% in the past 12 months to £228,000. Other examples are Craigavon, Newtonabbey and Downpatrick. The boom in the region is down to a buoyant economy, increased immigration and a rise in demand from people wanting to own a second home.

In northern England, average house prices have jumped above £150,000 for the first time, rising 4.3% to £155,188.