July’s average prices were also 1.6% higher than in June, the Halifax House Price Index revealed, offering yet more indication of a property mini boom prompted by the reopening of the market and the stamp duty holiday.
Although the three months from May to July experienced a dip of 0.2% when compared to the previous three months (February to April), Halifax said average house prices in July underwent their greatest month-on-month increase this year.
Russell Galley, managing director at Halifax, said: “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.”
Agents report ‘confidence’
Halifax said evidence from households and agents suggested confidence was growing and the housing market looked ‘brighter’ than many had expected.
This view was supported by Jeremy Leaf, north London estate agent and a former RICS residential chairman, who said: “We are pinching ourselves as strong pent-up demand for most types of property, especially small houses, and much of it brought forward by the stamp duty holiday, is supporting an upsurge in the number of sales agreed, reversing last month’s downturn.
“The increase in new listings is particularly welcome as it is providing more choice to buyers and helping keep prices in check.”
Unemployment threat
Others, however were taking a more cautious view of the figures. There were concerns about how the market might look in November when the furlough scheme ended and unemployment threatened households.
Andrew Montlake, managing director of mortgage broker, Coreco, said: “The mini-boom is real, but so are fears of a maxi-bust.
“Prices and activity are holding up well for now as the post-lockdown surge continues, but everyone knows that the autumn is when we will see the real impact of Covid-19 on the economy.”
He added: “The property market is a peculiar beast right now. Landlords are making hay while the stamp duty sun shines, and are especially active with holiday lets.
“Many people are also looking to take advantage of the stamp duty holiday to buy second homes.
“For first-time buyers, the picture is far less rosy. The stamp duty holiday has become academic as the people who it was intended for are least likely to be able to make use of it as borrowing at higher loan-to-values is increasingly difficult. It’s a classic fiscal clanger.”
