Surging house prices have pushed more than four million homes into higher stamp duty or equivalent tax brackets during the coronavirus pandemic, according to estimates from a website.

Across the UK, 4.3 million homes have been pushed into a higher bracket since March 2020, meaning prospective buyers face paying increased taxes to move home, according to Zoopla.

Stamp duty applies in England and Northern Ireland. In Wales, the land transaction tax (LTT) has replaced stamp duty and in Scotland the land and buildings transaction tax (LBTT) is applied to property purchases.

The average UK house price has increased by around £29,000 since March 2020 to stand at £249,700, Zoopla calculated.

Around one and-a-half million more properties across the UK are now subject to stamp duty or its equivalent tax compared with two years ago, according to Zoopla.

It said, in total, 3.5 million homes in England and Northern Ireland have moved up into a higher stamp duty threshold.

A further 815,000 properties have moved over property tax thresholds in Scotland and Wales.

A stamp duty holiday was in place for much of the pandemic and was phased out last year.

Zoopla said rising house prices are also having a huge effect on those keen to get their foot on the property ladder.

First-time buyers are now spending an average of £225,000 to buy their first home – an increase of £27,000 compared with two years ago.

Grainne Gilmore, head of research at Zoopla, said: “Buyer demand has been very strong ever since the end of the first lockdown in 2020 and the start of this year has been no exception.

“This demand, coupled with constrained levels of supply, has put upward pressure on pricing – with the average property now worth an additional £29,000 compared to March 2020.

“This has pushed millions more homes into higher stamp duty brackets, meaning that if they come to market, there is an additional cost for buyers.

“While homeowners who make a move will see the benefit from increased property values when they sell, new entrants to the market will have to find additional finance to fund a move – meaning the reliance on the ‘bank of mum and dad’ is likely to increase among first-time buyers.

“It also highlights the importance of first-time buyers having access to mortgage deals with smaller deposit requirements if they can meet the criteria for all other aspects of a mortgage loan.”

She added the website has identified some areas where there has been a notable rise in the supply of homes being listed for sale in the last month – with potential home buyers having more choice in areas such as Pendle in Lancashire, Elmbridge in Surrey and Southend-on-Sea in Essex.

Source: https://www.independent.co.uk/news/uk/zoopla-northern-ireland-scotland-england-wales-b2071064.html