Richard Sexton, director of the firm, said the momentum seen in house price growth has now “slowed significantly”, with the report arguing there is “clear evidence” of the pace of rises dropping.
It adds that while the market overall looks buoyant ‒ with prices over the year growing by 4.4% to a new record high of £314,643 ‒ this is in part due to measures like the Stamp Duty holiday, the furlough support scheme and the Help to Buy scheme, all of which are due to end in the coming months creating a “perfect storm”.
The report cautions: “Strip these out and the market might begin to look a lot less buoyant.”
Over the month of October, greater London was the region that saw the greatest growth according to the report, at 2.5%, ahead of the North East at 1.4%. This is in stark contrast to regions like the West Midlands, where prices rose by just 0.1% and the East Midlands, which saw an increase of only 0.4%.
Sexton suggested that the overall strong growth seen over the past 12 months is the result of the purchase of bigger, and often more expensive homes, which has been encouraged further by the Stamp Duty holiday.
He described the resilience shown by the housing market throughout the pandemic as “astounding”, adding: “The first national lockdown, which left many in England and Wales almost totally confined to their current homes, certainly seems to have re-focused the minds of a lot of consumers onto the property market.”
The report is cautious on the prospects for the housing market in the months ahead, noting that so much relies on the course of lockdowns, the pace of economic recovery and what Government interventions look like, let alone the potential impact of Brexit.
It concludes: “The first time buyer market in particular looks most exposed given the disproportionate labour market impact being borne by younger households, together with the more cautious approach by lenders. Some first-time buyers will be supported by parents, and of course there are parts of the economy where the squeeze has not been felt, so there can be no universal truth. Moreover, slowing (or perhaps falling) prices do create opportunities for some.”
