10:18 AM, 7th October 2020, About 10 months ago 5
The September Halifax House Price index has just been released showing annual growth of 7.3%, quarterly growth of 3.3% and a monthly increase of 1.6%. The new average house price now stands at £249,870.
The key question is how long will pent-up demand from the lockdown and the Stamp Duty holiday incentive continue to outstrip the supply side and drive house prices?
HMRC monthly property transactions data shows a fourth consecutive monthly rise in UK home sales in August with seasonally adjusted residential transactions up by 15.6% from July.
Bank of England figures show the number of mortgages approved for house purchases was 84,715 in August representing a rise of 28% from July and the highest level since October 2007.
Russell Galley, Managing Director, Halifax, said: “The average UK house price is now approaching £250,000 after September saw a third consecutive month of substantial gains. The annual rate of change will naturally draw attention, with the increase of 7.3% the strongest since mid-2016. Context is important with the annual comparison, however, as September 2019 saw political uncertainty weigh on the market.
“Few would dispute that the performance of the housing market has been extremely strong since lockdown restrictions began to ease in May. Across the last three months, we have received more mortgage applications from both first-time buyers and home movers than any time since 2008. There has been a fundamental shift in demand from buyers brought about by the structural effects of increased home working and a desire for more space, while the stamp duty holiday is incentivising vendors and buyers to close deals at pace before the break ends next March.
“It is highly unlikely that the housing market will remain immune to the economic impact of the pandemic. The release of pent up demand and indeed the stamp duty holiday can only be temporary fillips and their impact will inevitably start to wane. And as employment support measures are gradually scaled back beyond the end of October, the spectre of increased unemployment over the winter will come into sharper relief.
“Therefore while it may come later than initially anticipated, we continue to believe that significant downward pressure
on house prices should be expected at some point in the months ahead as the realities of an economic recession are felt ever more keenly.”
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