Asking price/Sold price gap narrows thanks to stamp duty holiday

The stamp duty holiday frenzy has reduced the gap between asking and sale prices according to new research.

Before the start of the holiday last summer, asking prices averaged £277,104 but buyers actually paid £248,102 – a 10.5 per cent difference.

But the rush to take advantage of the stamp duty exemption has seen buyers paying more and the gap reducing, to just 7.2 per cent.

And the market as a whole has ratcheted upwards: sold prices have averaged £261,325 since the introduction of the holiday, up 5.3 per cent when compared to the previous average of £248,102.

GetAgent, the comparison website which commissioned the research behind the figures, says the gap would have closed further had sellers not hiked asking prices by well over one per cent in recent months.

The site’s chief executive, Colby Short, says: “It’s inevitable that sellers will enter the market at a higher price than they’re likely to sell for and so sold prices are almost always going to come in at a lower average than asking prices.

“However, in hot market conditions, this gap tends to close as more buyers fight it out for the same property and at present, we’re seeing a pretty hot market indeed. So much so that sold prices in both London and the North East have actually crept above the average asking price since the introduction of the stamp duty holiday, while all but one other region has seen the gap close.

“With more money in their pockets and more competition when trying to secure a home, buyers are paying that little bit more. Of course, this gap would be wider, but savvy sellers are also entering the market at a higher price point in order to make the most of these buoyant market conditions.”

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