Mini-boom drives house prices up 1.6% in July

Mini-boom drives house prices up 1.6% in July

9:03 AM, 7th August 2020, About 4 years ago

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The August Halifax House Price Index has just been released showing the results of the Stamp Duty holiday with a sharp increase pushing prices to their highest ever levels in July at an average house price of £241,604.

The ‘mini-boom’ drove house prices up in July to 1.6% higher than in June, on a monthly basis. However, in the latest quarter (May to July) house prices were 0.2% lower than in the preceding three months (February to April)

House prices in July were 3.8% higher than in the same month a year earlier, but market uncertainty remains with likely greater downward pressure on prices in the medium term.

Russell Galley, Managing Director, Halifax, said: “Following four months of decline, average house prices in July experienced their greatest month on month increase this year, up 1.6% from June and comfortably offsetting losses in 2020. The average house price in July is the highest it has ever been since the Halifax House Price Index began, 3.8% higher than a year ago.

“The latest data adds to the emerging view that the market is experiencing a surprising spike post lockdown. As pent-up demand from the period of lockdown is released into a largely open housing market, a low supply of available homes is helping to exert upwards pressure on house prices. Supported by the government’s initiative of a significant cut in stamp duty, and evidence from households and agents suggesting that confidence is currently growing, the immediate future for the housing market looks brighter than many might have expected three months ago.

“However, looking further ahead, there is still a great deal of uncertainty around the lasting impact of the pandemic. As government support measures come to an end, the resulting impact on the macroeconomic environment, and in turn the housing market, will start to become more apparent.

“In particular, a weakening in labour market conditions would lead us to expect greater downward pressure on prices in the medium-term.”

HMRC Monthly property transactions data shows a rise in UK home sales in June. UK seasonally adjusted residential transactions in June 2020 were 63,250  up by 31.7% from May following the lifting of COVID-19 lockdown measures. Quarter-on-quarter transactions were approximately 47% lower than quarter one 2020.

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