House prices fall for the fourth month in a row – will Rishi Sunak ride to the rescue?
The report, issued this morning, details that average property prices have slipped 0.1 percent over the past month, and 0.9 percent over the last quarter ending in June. However, when viewed on an annual basis, average property values have increased 2.5 percent with the average UK house price now at £237,616. Of course, as a lender Halifax can only provide figures based on the mortgages they have approved for their customers, which explains why this latest data varies when compared to the data released by Nationwide last week.
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What does appear to be consistent between both sets of figures, however, is the month on month change in property values, a figure that’s consistent between both indices.
Russell Galley, Managing Director of Halifax commented: “Average house prices fell by 0.1 per cent in June as the UK property market continued to emerge from lockdown.
“Though only a small decrease, it is notable as the first time since 2010, when the housing market was struggling to gain traction following the shock of the global financial crisis, that prices have fallen for four months in a row.”
Russell continued: “Activity levels bounced back strongly in June, which is typically the busiest month for mortgage activity in the UK.
“New mortgage enquiries were up by 100 percent compared to May, and with prospective buyers also revisiting purchases previously put on hold, transaction volumes rose sharply compared to previous months. However, whilst encouraging, it remains too early to say if this level of activity will be sustained.”
Director of London estate agency Benham and Reeves, Marc von Grundherr suggested this is a fair reflection of the stability of the UK housing market despite the current headwinds.
He pointed to today’s figures providing: “Yet more evidence that the UK property market is yet to run out of steam and while uncertainty remains due to the current landscape it seems that this is failing to deter a nation of aspirational homeowners.
“The potential announcement of a stamp duty holiday by the chancellor tomorrow should help lift market sentiment, certainly where buyer demand is concerned. Of course, some are already forecasting that many buyers will hold off now to benefit later, causing a slump in the market as a result.”
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Marc added: “The flip side to this is that with such demand already returning to the market, postponing a purchase until October could see the price of your chosen property increase in value, exceeding the saving you might have made on any stamp duty saving. So, any buyers considering such an idea may be ill-advised to take the risk.”
Managing Director of mortgage broker Enness Global Mortgages, Hugh Wade-Jones also took an optimistic view, and observed the latest figures are: “More positive news for the UK property market with house price growth holding firm on an annual basis and hopefully the first of a double dose of positivity this week, with a potential stamp duty holiday being announced tomorrow.
“We’ve seen a promising increase in market activity in recent months, and this has been particularly driven of late by foreign buyers returning to the top tiers of the market.
“While domestic activity remains the backbone of the UK property sector, it is this foreign investment that will help spur the market back to full health.”
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“Although it might take a little while longer to materialise at the top level, it bodes very well for the remainder of the year where overall house prices are concerned” says Hugh.
Following rumours yesterday that Chancellor Rishi Sunak will be announcing a stamp duty holiday tomorrow in his Summer Economic Update, many in the property and finance sectors have voiced fears that unless any moves announced are immediately implemented, this could push the recovery of the housing market into reverse gear.
If the savings are available straight away, however, it could fuel a resurgent market that would underpin Britain’s wider financial recovery.
While the spectre of widespread unemployment certainly casts a shadow, given the thousands of property transactions that were put on hold during lockdown, there are still significant numbers of motivated home movers who clearly don’t want to put their plans on hold any longer.
Russell Galley concluded: “Of course, come the autumn, the macroeconomic landscape in the UK should be clearer and the scale of the impact of the pandemic on the labour market more apparent.
“We do expect greater downward pressure on prices in the medium-term, the extent of which will depend on the success of government support measures and the speed at which the economy can recover.”
Over to you, Mr Sunak.
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