Seven days that shook Britain’s housing market
From stamp duty cuts and a property slump, we chart the tumultuous week
The past seven days may have been a long time in politics but it has also been a tumultuous week for the property market swinging from a surge in interest rates to a slump in the market and the beginnings of a property crash. Here’s what happened and what could happen next:
The chancellor Kwasi Kwarteng presents a mini-budget packed with tax cuts including raising the stamp duty threshold from E125,000 to £250,000 with first-time buyers now exempt from paying tax on the first £425,000 of a £625,000 property in England and Northern Ireland.
The calm before the storm. Estate agents’ phones stop ringing as buyers digest two pieces of conflicting news with the Bank of England, which had raised interest rates the day before by 0.5 percentage points to 2.25 per cent trying to calm inflation while the Treasury announces stimulating tax cuts. Within an hour of the announcement, traffic to the Rightmove property portal jumps by 10 per cent and the phones start ringing again.
“We had a couple of buyers who had paused on transactions not exchanging until they had found out what was in the budget but as soon as it was announced they carried on. There are still plenty of sellers coming to market too,” says Simon Tollit, partner at Tedworth Property estate agency in central London, who also reports an uptick in long-term renters who are inquiring about buying because inflation is eroding their cash reserves.