Mon. Dec 6th, 2021


British house prices made the biggest profit in nearly 15 years in September when the government’s holiday stamp duty came to an end, despite stagnation in the London property market.

The cost of the average home was 1.7 percent higher last month compared to August, the fastest monthly increase since February 2007, according to mortgage lender Halifax.

House prices rose by 7.4 per cent compared to last September, pushing the typical value of a house to £ 267,500, the highest on record.

Jonathan Hopper, CEO of Garrington Property Finders, said the rise in prices shows that “the boom of the pandemic is still alive”.

Russell Galley, managing director of Halifax, said the end of the stamp duty holiday in England and Northern Ireland, and a desire among homebuyers to close deals quickly, was likely to be a small factor in the rise as homebuyers at most mortgages signed in September were not settled before the tax break expired.

Greater London was a standout, as people moved to less populated places, with an annual growth rate of only 1 per cent. It was the only area that has seen a drop in house prices over the past three months.

Line chart of £ 000 showing average house price in the UK to a record high

‘The’ race for space ‘as people change their preferences and lifestyle choices have undoubtedly had a big impact,’ Galley said, while apartment prices rose just 6.1 per cent, compared with 8.9 per cent for semi-detached properties and 8.8 percent for freestanding.

From 1 October, the thresholds at which buyers could avoid paying stamp duty fell from £ 250,000 to £ 125,000, the level of July 2020, before the tax holiday was introduced to stimulate the housing market after the first national closure. The threshold was £ 1,000 until 1 July.

The driving force was “now old-fashioned market principles and the chronic imbalance between supply and demand”, says Hopper.

Andrew Wishart, a real estate economist at Capital Economics Consultant, said continued strong demand and limited house supply meant prices could rise further.

Good mortgage availability at record low interest rates, strong wage growth and the savings that many people built up during lockdown all point to a strong housing market, says Mike Scott, chief analyst at real estate agency Yopa.

Official data showed that the ‘effective’ rate — the real interest rate paid on newly-mortgaged mortgages — dropped to 1.82 percent in August, an near-record low.

However, rising inflation, rising energy prices and impending tax increases are expected to ease the demand for housing in the coming months.

Due to the withdrawal of leave, rising inflation and cost of living and the recent increase in national insurance, the forecast for house prices looks much less favorable, says Scott Taylor-Barr of Carl Summers Financial Services in Shropshire.

“Add to that the usual Christmas delay, and we can expect the real estate market to lose some of the wind of its sails in the coming months,” he added.



Source link

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *