Posts with tag: Benham and Reeves

Halifax reports average house prices increased sharply in September

Published On: October 11, 2021 at 8:12 am

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Average UK house price rises again, Halifax House Price Index reports

Average house prices increased 7.4% annually in September, Halifax’s latest figures show, up from 7.2% in August.

The report also states that the average UK property price is now at a record £267,587. Wales continues to outperform the UK average house price inflation, with an annual growth of 11.5%. Scotland has also continued to outperform the UK average, with a growth of 8.3%.

Industry reactions

James Forrester, Managing Director of Barrows and Forrester, comments: “Although the second phase of the Stamp Duty holiday continued to offer a notable saving for a great deal of homebuyers, we simply didn’t see the same mass panic to complete ahead of the deadline that had previously gripped the market. So, it’s unlikely that the buoyant conditions we’re still seeing are solely a result of the holiday itself.

“While there will no doubt be some form of erratic price movement on a month-to-month basis until the market settles down for good, we don’t expect the removal of this tax incentive to significantly impact the market at any level.”

Marc von Grundherr, Director of Benham and Reeves, comments: “The Stamp Duty holiday clock has now well and truly expired and those to have seen a last gasp saving would have entered the market many months ago in order to complete in time. As such, it’s fair to say that the property market is very much standing on its own two feet and so any fears of a market collapse following the Stamp Duty holiday can now be well and truly put to bed.

“Of course, such heightened levels of market activity may inevitably bring a slight cooling in the rate of house price growth, but that’s to be expected.

“The London market has been waiting patiently in the shadows watching manic levels of activity play out across the rest of the UK. The higher price of property has long seen many London homebuyers disregard the importance of the Stamp Duty holiday, particularly since the price threshold was reduced.

“However, we’ve seen a far more natural level of momentum building across the market and this looks set to snowball during the autumn and winter months. As a result, our money is on London to finish the year with the most impressive performance where house price growth is concerned.”

Colby Short, Founder and CEO of GetAgent.co.uk, comments: “It’s a relief to have woken up and seen the world still turning post Stamp Duty holiday having heard many spout predictions of property market Armageddon.

“While Stamp Duty may be a dubious government money grab in the eyes of most, it’s simply not enough to deter our aspirations of homeownership and the market is still in very good health.

“The cost of borrowing remains favourable and this will continue to fuel demand while a significant imbalance between this demand and the stock available will ensure house price growth remains buoyant.”

Walid Koudmani, market analyst at financial brokerage XTB, comments: “Data from Halifax showed UK house prices grew 7.4% annually, whilst a monthly growth of 1.7% was the strongest pace since 2007. This cuts a three-month downward trend in annual price growth.

“It’s clear one key driver of the price growth continues to be hunger for houses as buyers demand more space as firms have moved to maintain flexible working between the office and home. This is why house price growth exceeds flat price growth by 8.9% to 6.1%. Yet also the lack of supply is also a key driver here behind the price growth, with many buyers bringing completions early to take advantage of the Stamp Duty discount which has now expired.

“It’s likely that supply will continue to be short in the very near term and this may likely keep house prices elevated in the months ahead. The medium-term picture remains much more uncertain however as its likely prospective buyers may start to be priced out due to looming interest rate rises and inflationary pressures.”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, says: “A reality check has been forthcoming — it’s just not the one anyone was expecting. 

“House price growth has accelerated just as the market’s crutches have been taken away. This is the exact opposite of what logic dictated should have happened in September and tells you the rally isn’t over yet. 

“The housing market has hurtled into what had been widely billed as a period of adjustment but its reaction has defied gravity yet again.

“All major government support, in the form of the furlough scheme and Stamp Duty giveaway, had effectively vanished in the minds of these buyers. However, fears of an immediate and animated slowdown have come to nothing. 

“This suggests the pandemic has done more than deliver a head-turning run of record highs. Changes in property shopping habits could well have some of the permanence that has only been an article of faith so far, even once you factor in the persistent lack of stock that continues to put a floor under prices.”

Lucy Pendleton, property expert at independent estate agents James Pendleton, comments: “The market has delivered a record high just as the stool was being kicked away. It also did it in some style. The last time we saw monthly price growth like this, Tony Blair was Prime Minister.

“For all the talk of this rally slowing, it’s still right up there with some of the most bullish markets on record.

“However, London continues to underperform. Average prices are so much higher in the capital that a period out of the limelight isn’t necessarily a problem on paper but investors are keeping a keen eye on London’s post-pandemic recovery. Ultimately, they will go where the demand is but it’s too early to tell whether an influx of buyers and renters will put the capital back in pole position next year in relative terms. 

“The reinstatement of an office into people’s work routine is still a work in progress but, judging by the number of people we speak to who have done a screeching u-turn on plans to move to the country, rumours of a weakening of demand for London property seem to have been greatly overstated. 

“Buyers with the flexibility to drop everything and go on a viewing are becoming rarer by the day. People are living their new normal — it’s just not as new as we all thought it was going to be.

“The economic pain expected over the next six months could hasten the capital’s re-emergence as the country’s best performing region but that’s a silver lining to a dark cloud that could sorely affect the wider market.

“The uncertainty of a world not propped up by Stamp Duty tax breaks and furlough handouts is likely to most severely affect the regions where growth has truly been on fire.”

Karthik Srivats, co-founder of mortgage lender Ahauz, comments: “It’s been a frenetic time in the housing market and this data shows things have not got any easier for first-time buyers.

“The tail end of the Stamp Duty holiday has seen a bump in house prices after a period in which the pace of annual growth appeared to be slowing slightly.

“Growth in prices continues to outstrip wages and raising a deposit the old-fashioned way through patient savings remains an unrealistic dream for most. With the cost of living going up and an upcoming increase in taxes, first time buyers across the country are craving for any kind of support to get on the property ladder.

“One piece of good news is that first time buyers now have sole access to Stamp Duty relief on purchases up to £300,000 which may give them a slight edge going forward. 

“Looking ahead, while many are still forecasting more modest gains later in the year, it really is a case of, believe it when you see it.

“Rock bottom interest rates and a continued demand for bigger homes with more outdoor space may well support buyer activity for some time to come.”

Government data shows house price growth is slowing month-on-month

Published On: September 20, 2021 at 8:22 am

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UK house prices see ‘marginal decline’ in October 2021

Average UK house prices were down month-on-month in July, according to the latest government House Price Index.

The HM Land Registry report shows that the average property price in the UK for July was £255,535. This is an annual increase of 8.0%, but a monthly drop of -3.7%.

James Forrester, Managing Director of Barrows and Forrester, comments: “A prolonged period of property panic buying spurred by the chance of a Stamp Duty saving has seen UK homebuyers essentially clear the shelves over the last year.

“So, a natural market adjustment is always going to occur in the run-up to each of the staggered deadlines. However, the proof in the pudding is yet another strong annual rate of growth and the reality is that there has been no let-up in demand, while available stock also remains scarce.

“So, where the long-term health of the market is concerned, we are yet to see any signs of a wobble.”

Marc von Grundherr, Director of Benham and Reeves, comments: “While there is no snooze button this time around where the Stamp Duty deadline is concerned, the end of this government tax reprieve is unlikely to act as a pothole in the property market’s road to recovery.

“A certain level of natural realignment is to be expected but those who judge the market on such an erratic, short term metric as monthly house price growth are ill-advised to do so.

“We’re now heading into what is traditionally one of the busiest times of the year and we expect buyer demand to remain consistently high throughout.

“We also expect the return of foreign buyer demand to further boost the UK housing market over the coming months, with London, in particular, seeing a sharp increase in market activity and house price growth.”

Colby Short, Founder and CEO of GetAgent.co.uk, comments: “Before we run for the hills at the first sight of a house price decline it’s important to note that the market has been moving at a record pace for a sustained period of time and so a pause for breath is more than natural.

“We know the Stamp Duty holiday has had an incredible impact and so a monthly decline following both deadlines is to be expected. However, market sentiment is still extremely high and while mortgage affordability remains at record lows, the housing market will continue to blossom well into autumn and beyond.”

Iain McKenzie, CEO of The Guild of Property Professionals, says: “These figures show a slight readjustment in the market, fuelled by a partial slowdown in activity in some parts of the country.

“There remains an uneven balance between demand and supply, and some buyers will be holding back until estate agents are able to increase their stock again, after months of frenzied purchases.

“On the other hand, desperate buyers who want to get in the market as soon as possible will be willing to pay more to outbid others, and this is likely to result in further house price growth this year.

“Prices continue to grow faster in areas that are traditionally considered cheaper, such as the North East. More people are getting their foot on the property ladder here and the Stamp Duty holiday still applies to properties under £250,000.

“If prices do fall slightly, this may encourage more first-time buyers to make the leap toward home ownership, but they will also need to remain buoyant to entice more homeowners to sell.”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, says: “The housing market has been on afterburners for so long, it’s hard to imagine growth doing anything other than slowing over the rest of the year.

“As the Stamp Duty holiday tapers this could be the start of that gradual softening, though sustained falls in valuations remain unlikely with bidding wars still rife for the most desirable homes.

“The market continues to be thrown off balance in many parts with buyer demand high and supply definitely down. We’re still seeing ‘For Sale’ signs being ripped out of the lawn almost as soon as they are planted in some areas, and in many parts of the country estate agents’ shelves are still looking bare.

“While this new data suggests things may be calming, it’s far too early to predict the end of the boom. Don’t be surprised to see more record highs this year, in what remains a sellers’ market. Most analysts have given up trying to predict the future.”

Government shares house price data for final month of Stamp Duty holiday

Published On: August 23, 2021 at 7:42 am

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The commuter belt rental markets where tenants can reduce their rent by as much as half

The statistics for June 2021 reported in the Government’s UK House Price Index reveal an annual price change of 13.2%.

The monthly price change for a property in June was 4.5% and the overall average price of a UK property was £265,668.

Industry reaction to the Government’s latest house price data

Marc von Grundherr, Director of Benham and Reeves, comments: “Another behemoth level of house price growth both on a monthly and annual basis, no doubt influenced by the first of the staggered extensions to the Stamp Duty holiday as homebuyers purchasing above the £250,000 threshold continued to scramble to secure a saving before the clock expired. 

“The London market has seen a lesser degree of property market manipulation as a result of the Stamp Duty holiday. As a result, the capital continues to trail where property price appreciation is concerned but we’re seeing a far more stable market start to emerge and one that is showing greater long-term momentum as both domestic and foreign interest start to return.

“Sales are increasing, sellers are achieving a greater level of asking price than they were just a few months ago, and all of these indicators suggest a property market resurgence is stirring.”

James Forrester, Managing Director of Barrows and Forrester, comments: “The UK property market continues to flourish driven, in part, by the Stamp Duty holiday but also the ongoing trend for larger homes, with detached properties seeing a huge 15.6% annual increase. 

“We now know that the initial Stamp Duty deadline at the end of June has failed to dampen this appetite and the market cliff edge that many predicted is now starting to look very unlikely. With buyer demand remaining extremely robust and stock shortages plaguing much of the market, it’s safe to say house prices will continue to climb throughout the remainder of the year.”

Colby Short, Founder and CEO of GetAgent.co.uk, comments: “We’ve seen an uplift in transaction levels in the last year alone and properties are now selling far quicker and for a much higher price. 

“However, it’s important to remember that when looking to buy in current market conditions you’re really facing a two-speed market posing very contrasting challenges. 

“The initial challenge is securing a property as they go under offer within weeks, sometimes days, of being listed for sale. The cost of doing so is also going to be considerably higher and that’s something to factor in when looking to buy. 

“But beyond this point, there remain sizable delays and so the likelihood is that you won’t see your sale actually complete until some months later.”

Iain McKenzie, CEO of The Guild of Property Professionals, says: “These figures paint an arresting picture of the frenzy we saw towards the end of the full Stamp Duty holiday as house prices boomed with buyers rushing to get their key in the lock.

“Areas outside of London still continue to lead the way on house price growth, as people scour the country for more living space.

“Despite the winding down of the Stamp Duty holiday and more people feeling the pressure to return to the office, all the elements are still in place for house prices to remain higher than usual for the foreseeable future.

“With demand for properties still ever-present and estate agents across the country facing a smaller pool of homes to sell, many prospective buyers will also be sitting on their deposit until the perfect home comes along. This factor will keep prices higher in the long term.”

Lucy Pendleton, property expert at independent estate agents James Pendleton, comments: “Prices went berserk as the Stamp Duty taper closed in. The pace of growth set in the North West is frankly astonishing. This is the last time this year, or even in our lifetimes, that you’ll see growth spurts like this in response to government support.

“Scenes like this are only possible in those areas starting from a lower base, and there’s a big question mark over how many of these buyers really made a saving. Amid fierce competition, there’s a good chance that many of them became so committed to a particular move that the financials were thrown out with the bath water. 

“Needless to say, as soon as July arrived, we entered a very different market, and some of this exuberance will have to unwind. London is probably most protected from that eventuality. Prices are still approximately double the national average in London but the capital hasn’t had its running shoes on like the rest of the country. 

“London remains the dark horse of the property market. It’s much harder to predict where it will go over the remainder of the year, though demand is certainly broadening out. The rental market is once again on fire, demand is spreading to a greater range of property types as the race for space fades and even the supercars are back in Knightsbridge.

“These new trends have been forming ever since the country had unlocking in its sights. The capital could well turn the tables on the rest of the country over the next 12 months.”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, says: “The last gasps of the Stamp Duty holiday injected a sense of urgency into buying patterns with house hunters desperate to land the home of their dreams before the tax giveaway largely vanished.

“This data also shows the race for space is still in full swing with the relentless escalation of house prices continuing across the country, and areas not typically at the forefront suddenly finding their moment in the sun.

“Ultra-low interest rates and shrinking housing stock continue to fuel a red-hot market amid a stampede which some are now likening to the gold rush. The fever gripping the North West in particular is something to behold.

“And in London where growth has been more modest, agents are now bracing themselves for a return to full-throttle as investors from the Gulf return to the market with the UAE now on our amber list.

“A tremendous buzz is building in the capital and viewings from overseas investors are already beginning to soar with many wondering if we will witness the same double-digit growth in London that has already been recorded in other areas of the country.

“While we expect things to steady later in the year, there is nothing in this data to suggest the brakes will be applied heavily to what has become a run-away market.”

House prices increased in July but growth has begun to cool off annually, reports Halifax

Published On: August 9, 2021 at 8:16 am

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Average UK house price rises again, Halifax House Price Index reports

Although UK house prices increased again in July, annual growth within the property market appears to be cooling off, the latest Halifax House Price Index shows.

The highlights include:

  • Annual house price inflation is at 7.6% compared to 8.7% in June
  • The average price of a UK property is now £261,221, up 0.4% in July
  • Wales records strongest house price growth since 2005

Russell Galley, Managing Director of Halifax, comments within the report: “Latest industry figures show instructions for sale are falling and estate agents are experiencing a drop in their available stock. This general lack of supply should help to support prices in the near-term, as will the exceptionally low cost of borrowing and continued strong customer demand.”

“We are seeing on the ground that the demand for properties is still high, and estate agents across the country are clamouring for stock – especially those elusive detached family homes that are so sought after at the moment.

“It’s going to be interesting to see if this cooling down of annual house price growth is indicative of a slight adjustment on the horizon that could see a return to a more stable market as we move out of the pandemic.

“If that does happen, we should expect the demand to stay high, as buyers who currently feel priced out in a competitive market will return to the market to get their feet on the property ladder.”

Marc von Grundherr, Director of Benham and Reeves, comments: “Just when you thought the wild ride of property price growth seen over the last year might be coming to an end, the market has bounced back yet again to register further positive movement.

“As we approach the third and final Stamp Duty holiday deadline it’s only natural that the rate of house price growth will ease as market activity reduces but despite this, we certainly look on course to finish the year on a very positive note.”

James Forrester, Managing Director of Barrows and Forrester, comments: “The house price boom continues and even the unpredictable British summertime can do little to dampen the enthusiasm of UK homebuyers and sellers as properties continue to sell incredibly quickly and for a very good price across the vast majority of the nation.”

Colby Short, Founder and CEO of GetAgent.co.uk, comments: “A shortage of stock, high demand and the lower cost of borrowing will keep the market buoyant far beyond September and the end of the Stamp Duty holiday. However, should interest rates start to creep up over the coming months, many homebuyers could find themselves in a tough spot having paid over the odds for a property in current market conditions.”

Ben Taylor, CEO of Keller Williams UK, comments: “Homebuyer confidence remains high at present despite many having to battle it out with multiple other buyers in order to secure a purchase. This continued imbalance between supply and demand will ensure house price growth remains buoyant over the summer months, although we can expect a slow in pace as we approach the final quarter due to a combination of the Stamp Duty holiday ending and wider seasonal influences.”

Lucy Pendleton, property expert at independent estate agents James Pendleton, comments: “The housing market is plateauing, not peaking, and London is getting its mojo back as the country returns to normal. Anyone who believes the market is going to take a tumble just because the Stamp Duty holiday has largely ended is writing their own epitaph.

“A softer annual growth rate is simply a symptom of the pressure coming off buyers a little. There’s no longer a reason to compromise on price for the sake of speed. Whereas, before, they had minutes to make a decision, they now have the luxury of a few days in many cases to make up their minds. Demand is still strong and there remains a shortage of stock right across the country.

“The reality is that no one we’re dealing with is even mentioning the Stamp Duty holiday. It’s a distant memory, and many of those who realised they weren’t going to make the June deadline and stepped away, have returned, determined to make their move happen. There isn’t the same level of activity as there was four months ago but that was never going to be the case.

“London, which hasn’t seen prices grow as fast as the rest of the country since the pandemic began, is getting back on the front foot. Workers, particularly young professionals, are moving back into the centre of town. Employers are indicating it’s time to get back to work, and this generation have got the memo. The lettings market is off the chart and this is usually an early indication that there are heady days to come for the capital’s sales market too.

“Meanwhile, the phenomenon of escaping to the country seems to have burnt itself out. Those who were going to go, have gone. Everyone who remains belongs in the category of loving the idea but going sour on the expense and disruption involved. It’s very much like when you return from holiday with plans to buy a holiday home. You keep the dream alive for a couple of weeks and then real life takes over and it’s forgotten. It doesn’t help that you can now pay as much in Padstow as Putney.”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, comments: “This data shows the era of ballooning house prices is not over yet, even if a little air is now slowly starting to hiss out of the market.

“While annual growth has softened slightly since the frenzied heyday of the Stamp Duty holiday, there is still a great wall of money coming into the market despite the phasing out of this much celebrated tax break.

“Super low interest rates, shrinking housing stock, greater mortgage availability and government support for buyers should mean house price growth remains resilient into the autumn.

“Buyers are still piling in, hungry for bigger homes with more space and gardens in areas rich with amenities, and only time will tell if this shift in demand away from cities has been exaggerated.

“Though house price growth in London remains sluggish at the moment, we are already seeing a rise in enquiries nationally for city boltholes and pied-à-terres.

“More people than ever desire a second home and there’s nothing like having a place right in the centre of it all.

“We expect the housing market across the UK will continue to mirror the robust performance of the economy at large as businesses take-off again following the lifting of restrictions.”

Annual house price growth remains in double digits but down month-on-month

Published On: July 30, 2021 at 8:31 am

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Annual house price growth remains in double digits but slows month-on-month

House price growth in the UK is slowing down, but currently remains in double digits, according to the latest Nationwide House Price Index.

The July report on UK house prices from Nationwide states the following highlights:

  • Annual house price growth remained in double digits, but fell back to 10.5%
  • Prices are down 0.5% month-on-month
  • The average house price is now £244,229

Robert Gardner, Nationwide’s Chief Economist, comments within the report: “Annual house price growth slowed to 10.5% in July, from the 17-year high of 13.4% recorded the previous month. In month-on-month terms, house prices fell by 0.5%, after taking account of seasonal effects, following a 0.7% rise in June.

“The modest fallback in July was unsurprising given the significant gains recorded in recent months. Indeed, house prices increased by an average of 1.6% a month over the April to June period – more than six times the average monthly gain recorded in the five years before the pandemic.

“The tapering of Stamp Duty relief in England is also likely to have taken some of the heat out of the market. The nil rate band threshold decreased from £500,000 to £250,000 at the end of June (it will revert to £125,000 at the end of September). This provided a strong incentive to complete house purchases before the end of June, especially for higher priced properties. For those purchasing a property above £250,000, the maximum Stamp Duty saving reduced from £15,000 to £2,500 after the end of June.”

Colby Short, Founder and CEO of GetAgent.co.uk, comments: “It’s probably fair to say that while an extension was welcomed, the Stamp Duty holiday is starting to linger over the market like a bad smell.

“For the vast majority, the intended benefit has now been nullified thanks to the huge rates of house price growth seen since launch. With the long delays that have also ensued as a result of such unprecedented levels of buyer demand, it’s arguably never been less appealing to embark on the archaic process of buying a home.

“Despite this, homebuyers have, and will, continue to flock to the market in order to realise their dream of homeownership and this will help maintain the upward price trends seen of late.”

James Forrester, Managing Director of Barrows and Forrester, comments: “The recent heatwave may have subsided but the property market is still running red hot and, despite the odd month to month wobble, we continue to see double-digit annual growth which is a phenomenal rate to have been sustained so consistently.

Marc von Grundherr, Director of Benham and Reeves, comments: “Even the apocalyptic wet weather seen over the weekend can’t dampen the UK housing market, with yet more strong upward movement despite the impending expiry of the Stamp Duty holiday.

“Even in London where the rate of house price growth has been less pronounced than the rest of the UK, homes are selling at a rate of knots and homesellers are achieving a far higher percentage of asking price than they were just a few short months ago.”

Ben Taylor, CEO of Keller Williams UK, comments: “A severe shortage of housing stock, the low cost of borrowing and a high level of buyer confidence are the perfect ingredients to maintain what has been a pretty impressive run of house price appreciation.

“The widespread talks of a market cliff edge once the Stamp Duty holiday ends have now turned to hushed whispers and while record rates of growth will inevitably lead to some monthly ups and downs, the long-term health of the UK property market is looking very good at present.”

Iain McKenzie, CEO of The Guild of Property Professionals, says: “House prices took a small pause from their breathless race to new heights this month, but there was no sign of a serious slowdown due to the winding down of the Stamp Duty holiday.

“Demand is still strong and, while there has been a slight adjustment in some areas, house prices are still way above the average figures we’ve seen in recent years.

“Let’s not forget as well that prospective buyers looking at properties under £250,000 are still eligible for the break in Stamp Duty and it’s likely that prices will remain high in those areas until the scheme ends.

“Buyers are still desperate to get their hands on those elusive detached family homes away from the big cities, and prices will keep being pushed up while supply lags behind.

“It’s going to be interesting to see how the demand for properties changes as we come into the autumn. This will give us the opportunity to evaluate just how successful the Stamp Duty holiday has been at keeping the property market buoyant since the start of the pandemic.”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, says: “Annual house price growth remains at a gallop though it has moderated slightly from last month’s exceptional spike.

“While the Chancellor’s tax incentives have begun to taper, a pronounced dip in housing stock means that demand continues to outweigh supply, and this imbalance should continue for some time to come.

“Going forward, the market will remain buoyant though the dynamics are already starting to shift.

“While the clamour in recent times has been for bigger properties with more outdoor space, we may see luxury apartments start to come back into vogue as the drift back to the office starts to gather pace in the big cities.

“In addition, we are still awaiting the return of international buyers which we expect to happen in the autumn, something that should prove a huge boost for Prime London which has been sluggish of late.

“In the meantime, first-time buyers finally have grounds for greater optimism as they continue to pay no Stamp Duty on properties less than £300,000 while others are now paying much more. This means the balance may finally be shifting back in their favour when bidding on more modestly priced homes, particularly with the added firepower of first-time buyers mortgages behind them.”

Lucy Pendleton, property expert at independent estate agent James Pendleton, comments: “The market’s minor monthly dip shows it was unmoved by the end of the most generous Stamp Duty discounts. Annual growth is roughly back to where it was in May, as prices continue to be pinned to the ceiling by a shortage of property hitting agents’ windows.

“This isn’t a market that agents or the public want to see because this absence of abodes is pushing the market into a doom loop of thinning supply. People are holding off selling their home because they lack all faith they will be able to find something they want to buy, therefore restricting the number of homes available even further.

“This dynamic supports prices but it can’t continue forever. Eventually this paucity of property will prove the trigger for a change of direction, partly because it lends more weight to the activity of first-time buyers who have tighter price pressures than those moving home higher up the chain.

“This tension will have to be released and could spell a rather unusual climax to the bull run, neatly reflecting its unusual beginnings last summer. We’ll look back on this period as one that completely defies the usual rules but basic economics will always win out in the end. Affordability pressures will eventually force the market into a reality check but first-time buyer support and low interest rates should prevent the boom from unwinding too rapidly.”

Latest government UK House Price Index shows growth continues

Published On: July 16, 2021 at 10:18 am

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Treasury loses £1.5 billion since hike in rented housing tax

The latest government UK House Price Index has been released, showing that house prices have increased by 10% in the year to May 2021.

The average price of a UK property during May was £254,624 and there was a monthly price change of 0.9%, the report states.

Marc von Grundherr, Director of Benham and Reeves, comments: “It’s clear that the extension of the Stamp Duty holiday caused the market to rebound immediately from the decline in market performance seen as a result of the original deadline. 

“Of course, it’s simply irresponsible to measure the health of the market based on a metric as erratic as the monthly rate of house price growth and anyone who seeks to do so would do well to retire their crystal ball to the cupboard from which it came. 

“The real proof in the pudding is the extremely strong performance seen on an annual basis and one that continues to defy expectation despite fears the market could soon run out of steam. 

“While London continues to trail the rest of the market in this respect, we’re beginning to see the cogs start to turn, driven by a return to the workplace and pre-emptive demand from foreign buyers in anticipation of a move later in the year. As a result, the London property market will continue to build momentum long after the carrot of a Stamp Duty reprieve has been removed.”

James Forrester, Managing Director of Barrows and Forrester, comments: “The property market continues to move forward at an alarming pace, powered by a full tank of buyer demand and a shortage of housing stock to satisfy this hunger for homeownership. While the end of the Stamp Duty holiday may well act as a slight bump in the road, it will take far more than a marginal decline in homebuyer sentiment to cause the wheels to fall off.”

Matthew Cooper, Founder & Managing Director of Yes Homebuyers, comments: “It’s abundantly clear that the market came to a shuddering halt due to the original Stamp Duty deadline and while we may now see transactions and house price growth yo-yo due to the double-pronged extension, there’s no hiding the fact that a correction is on its way.

“While the government may claim they have successfully kept the market afloat during the pandemic, the reality couldn’t be more different. House price affordability has spiralled and is now even further out of reach for the average homebuyer. Those lucky enough to secure a purchase remain bogged down in lengthy market delays and rather than build more homes, the government continues to feed the furnace to keep property values artificially inflated.

“It’s a real mess and one that will take some time to clean up once it does inevitably hit the fan.”

Ged McPartlin, Managing Director of Ascend Properties, comments: “House prices continue to boom, with the North West sitting on pole and driving market performance in this respect.

“It’s clear that the north-south divide has never been wider and while this momentous rate of price growth must inevitably slow at some point, we expect this vast difference in property pedigree to remain as buyers in the North continue to benefit from a far more affordable market, with, or without the benefit of a Stamp Duty saving.”

Lucy Pendleton, property expert at independent estate agents James Pendleton, says: “The latest UK HPI figures reflect sales that completed in May when buyers were still enjoying the full Stamp Duty holiday. At that time, the atmosphere was frenzied as buyers sprinted to complete sales before the end of June.

“Price growth has cooled a little since the deadline has passed, but the cliff-edge scenario many were predicting hasn’t played out. Prices haven’t collapsed, very few transactions have fallen through and we are seeing a healthy level of new instructions.

“This can be attributed to a number of factors. The race for space in many areas of the country hasn’t abated and demand remains at levels we were seeing several months ago.

“There’s still a lack of good quality stock coming onto the market, which means buyers are less worried about missing out on the full tax benefit as they are on a particular property. If anything, it’s a minor inconvenience for buyers, and not critical enough to derail transactions.

“The Stamp Duty break tapering off, rather than being cut off immediately at the end of June, has also avoided the prospect of a wave of transactions collapsing near the finishing line.

“Buyers don’t feel under pressure to complete and sellers feel more comfortable about listing knowing transactions aren’t likely to fail, and I don’t see that changing even as we approach the end of September, when the tapered relief ends.

“We are also expecting to see a buoyant market over the summer, when typically, activity drops off. With the majority of families holidaying at home this year, and many choosing to delay their holidays, more people will take this opportunity to push through house sales and purchases.

“London may have seen the slowest growth of any area over the past year, but there are also positive signs it’s finally waking from its slumber, as more restrictions have been lifted.

“And while the legacy of the pandemic is likely to see many businesses adopting flexible working policies, and fewer people having to commute into work full-time, the bright lights of the big city, and what it has to offer, still has a tremendous appeal.

“As soon as the Capital opens fully again, we are confident the property market will burst back into life.”

Iain McKenzie, CEO of The Guild of Property Professionals, says: “All good things must come to an end, and these figures capture the final frenzy to make the most of Government incentives to buy in the month before the Stamp Duty holiday began to be scaled back.

“However, several indicators show the enthusiasm is still thrumming through the property market, with mortgage approvals higher in May than they were in April.

“London has seen the slowest growth in house prices, partly owing to an already inflated market and large numbers of people who have moved out of the capital during the pandemic.

“Meanwhile, the North West has seen the largest jump in house prices as home-movers look for more space and value for money.

“There could be some fluctuation in the months ahead, but we are still anticipating prices to remain high. Lifestyle changes mean high demand will outlast the final closure of the Stamp Duty holiday at the beginning of October.”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, says: “The housing market has been running much hotter and faster than anyone expected, and despite a slight softening last month, today’s data shows there’s plenty of momentum still left.

“Low borrowing costs, reduced supply and an insatiable demand for bigger homes has spurred bidding wars and a spike in house values across the country.

“And while we may see growth start to decelerate slightly later in the year as the Stamp Duty holiday is phased out, the dizzying boom we are currently enjoying shows no sign of dipping.

“The remainder of the summer promises more breath-taking annual gains, with price growth in the North West continuing to set the pace.

“While the Stamp Duty holiday helped power the rally, momentum is now so strong that a phased return to full rates shouldn’t signal the beginning of a slump.

“And though growth in London remains the lowest in the country, it too is starting to pick up steam.

“Expect the tail of this boom to go on and on.”