House prices soar 7.5% in a year but it may all change soon
11-09-2020
House prices by the end of October were running 7.5 per cent above their level a year ago - but the strong run is about to slow, warns the Halifax.
They rose 0.3 in October itself, and in the quarter from August to October, house prices were 4.0 per cent higher than the previous three months.
This means the average UK house price is over a quarter of a million points at £250,547 for the first time in history, says the lender.
But managing director Russell Galley suggests we’ve hit the peak and the market is now set to slow.
“Underlying the pace of recent price growth in the market is the 5.3 per cent gain over the past four months, the strongest since 2006. However, month-on-month price growth slowed considerably, down to just 0.3 per cent compared to 1.5 per cent in September” he says.
“This level of price inflation is underpinned by unusually high levels of demand, with latest industry figures showing home-buyer mortgage approvals at their highest level since 2007, as transaction levels continue to be supercharged by pent-up demand as a result of the spring/summer lockdown, as well as the Chancellor’s waiver on stamp duty for properties up to £500,000” continues Galley.
“While government support measures have undoubtedly helped to delay the expected downturn in the housing market, they will not continue indefinitely and, as we move through autumn and into winter, the macroeconomic landscape in the UK remains highly uncertain.”
Industry commentator and London estate agent Jeremy Leaf says the quantity of viewings and offers are lower than two months ago, yet the quality enquiry remains strong despite wider economic clouds.
“Few offers or listings have been withdrawn so we expect the market to continue on this path for the next month or two at least, unless of course the stamp duty [holiday] deadline is extended” he says.
And Guild chief executive Iain McKenzie agrees about the current strength of the market.
“Despite the more stringent lockdown restrictions in place, both consumer sentiment and demand in the property market remains strong and the level of enquires and transactions remains unseasonably high. The vast majority of Guild Member agents are the busiest they have ever been and are focusing on getting customers moved in ready for Christmas, as well as before the stamp duty deadline.”