UK had a big drop in people moving homes after tax break lapsed

THE United Kingdom had a big decline in the number of people moving homes in the first half of 2022 after the expiration of a tax break on purchases, one of the nation’s biggest mortgage lenders said.

The figures from Halifax showed London and the South East of England had the largest declines, reflecting high prices that are limiting affordability. The rate of people relocating remains above its pre-pandemic level, suggesting strength in the market.

“House prices in the UK have risen for 12 months in a row, and real challenges remain with supply,” Andrew Asaam, homes director for Halifax, said in a statement Saturday (Jul 16).

“Other pressures on household budgets must be taken into account. The overall cost of home moving remains an expensive endeavor.”

A total of 172,510 people moved home in the 6 months to June, down 35 per cent from a year ago.

Last year’s numbers were boosted by a temporary cut in stamp duty, which is levied on property purchases. The government eased that tax to keep the market humming through Covid-19 lockdowns.

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Home re-locators now make up 47 per cent of all purchases, down 9 percentage points from a year ago, Halifax said.

Last week, Halifax said house prices rose in June at the fastest pace since early 2007, shrugging off concerns that the pandemic and recession that followed would take wind out of the market. The average price paid by movers reached £403,163 (S$668,921), up 5 per cent from last year and 42 per cent in the past 5 years. 

A separate report from the Royal Institution of Chartered Surveyors (RICS) earlier this week found the number of potential home buyers dropped for a third consecutive month. A lack of new properties being listed for sale helped prop up prices despite slackening demand, RICS said. BLOOMBERG