Compared to the rest of the country, it is easy to see why many people believe the London housing market should be classed as a separate entity. The prices in the capital are often higher than most parts of England, and the UK, but of course, there are many valid reasons for this.
Also, if you consider the London property market as a single entity, you overlook the fact that there is a great deal of variance.
When people talk about the huge prices for London homes, they often mean the prime London housing market in central areas. House prices in this part of the capital will make many people wince, but this isn’t the case all across London.
Hornchurch is an affordable option in London
Towards the end of January 2021, Rightmove states the following regarding the Hornchurch housing market;
“Properties in Hornchurch had an overall average price of £444,137 over the last year.
The majority of sales in Hornchurch during the last year were semi-detached properties, selling for an average price of £437,378. Terraced properties sold for an average of £392,176, with flats fetching £253,941.
Overall, sold prices in Hornchurch over the last year were 3% up on the previous year and 2% up on the 2017 peak of £434,437.”
The average price in Hornchurch stands below the average house price in London, and it stands beneath the stamp duty threshold.
Buyers in this part of London will have benefitted from the stamp duty, but the savings on offer are not as large as they have been in other areas.
Affordability is crucial when it comes to the London housing market
The findings suggest 85% of property transactions since July 8th have been below the £500,000 threshold. This means they are exempt from stamp duty for the duration of the holiday, and by looking at the average prices in Hornchurch, this will apply to many homes bought in the area.
Of course, homes that were affordable enough, or which were bought by first-time buyers would likely have been exempt from stamp duty anyway. The average price of flats in Hornchurch suggests that FTBs in the area could have purchased a flat and not paid any stamp duty, regardless of the holiday.
The findings indicate there have been stamp duty savings of £190m alone in the capital. 49% of London purchases completed below the £500,000 threshold, meaning no tax was paid.
By contrast, 99.7% of all residential transactions in Sunderland have been stamp duty exempt. This is because the homes were cheap enough to go below the main stamp duty threshold, or they were bought by first-time buyers.
The study found 147,969 transactions which would have been eligible for stamp duty without the holiday, but which were exempt as they concluded after July 8th.
The agency said; “Before the stamp duty holiday, the 147,969 homebuyers would have paid £1.444 billion in stamp duty. Thanks to the reprieve in place, the stamp duty paid equates to £627.467m, a saving of £817.0m.”
Around £5.6m a day have been saved by buyers since the stamp duty holiday was introduced.
If you are keen to stay in touch with the local housing market, we can help. At Hunters Hornchurch, we are on hand to ensure you receive all the guidance you need in the local property market, and we are here to assist you.