According to the popular property website, Rightmove, the average house prices in the UK have now risen above the 1% stamp duty threshold of £250,000.
Across England and Wales asking prices have increased to an average of £251,964, pushing them into the 3% stamp duty bracket.
A recorded 11.2% increase in London property prices means that sellers are hoping to make £541,313 from the sale of their homes.
Rightmove has recorded the biggest year-on-year house prices increase since 2007. The number of properties listed on the site also has increased by 18% to 27,768 per month on average.
“The shortage of properties on the market and pent up buyer demand is helping to push prices over that £250,000 level. It does mean that moving is more expensive, so as well as higher prices, more buyers are now having to pay additional stamp duty as well,” Miles Shipside, director of Rightmove commented.
Economic forecaster, Ernst and Young, has warned that London’s house market is exhibiting “bubble-like” conditions.
The Company has predicted that average house prices in the capital will rise to £600,000 by 2018 – 3.3 times the prices in the north-east of England.
However Rightmove does not necessarily agree that a bubble is being created.
“You get a bubble when people suddenly lose confidence, and that tends to be an economic crisis, and at the moment there doesn’t appear to be anything like that on the horizon,” Mr Shipside stated.
We are yet to see if a housing bubble is on the cards, however the UK’s property market has yet to reach pre-crisis highs.
“House prices across most of the country remain well below their pre-crisis peaks and there seems little danger of a bubble developing.
“But London, which is suffering from a combination of strong demand and a lack of supply, is increasingly giving us cause for concern,” Andrew Goodwin, senior economic adviser to the EY ITEM Club told the BBC.