Archive for the 'Main' Category

The Office of the Deputy Prime Minister (ODPM) has released its results for house price movements in February 2006, in which it reveals that annual house price inflation reduced to 3.6%, from 4.3% in January.

The fairly large fall in annual inflation is caused by ODPM figures showing average house prices actually falling in February – from around £185,500 to around £182,000

The result clashes with results from Halifax and Nationwide, who claim that house prices have shown distinct growth in 2006.

Earlier this morning, the Monetary Policy Committee (MPC) of the Bank of England decided to keep the UK interest rate at 4.5%. The rate has been at 4.5% for last eight months now.

With the majority of the nine members voting for no change in the interest rate for some months now, it is widely expected that it will be sometime before a change is made. Whether the change is up or down though is one for debate. Various factors make it unclear whether an upwards or downwards movement can be expected.

In his budget this year, Gordon Brown has made just a meagre increase to the bands for Stamp Duty. Despite large increases in property prices over the last few years, this year only the lowest band was increased – from £120,000 to £125,000.

This is estimated to cost Mr Brown around £40m in less tax income in the next year.

The remaining tax bands of 3% from £250,000 to £500,000 and 4% for over £500,000 remain unchanged.

Such high levels of taxation for owning your own home are beginning to cause a shift in the way people move up the property ladder. Instead of steadily moving up, paying Stamp Duty at each step, the high cost of the tax is now causing people to deliberately take large leaps up the ladder, thus avoiding tax on the steps they ‘leap over’.

For more information on Stamp Duty, see our Stamp Duty page in the Buying Section.

This post marks the start of a new era in House Buying Guide’s life. HBG will now keep you up to date with property news through the use of this blog, which will regularly be updated with latest events in property. To coincide with the blog, the design of HBG has been updated, to create a slightly smoother design. Now readers can give feedback and comments to articles on the site, through the use of the comments system – so please do let us (and your fellow readers) know what you think.