The stamp duty holiday is well and truly over, but UK house prices are continuing to increase due to a lack of homes coming on to the market. New data from the Land Registry shows prices are rising by 10% year-on-year, as buyers compete for properties.
What’s happening to the property market?
The property market is open and active throughout the UK, with estate agents conducting in-person house viewings and buyers are now able to move home with less restrictions. Since last July, the UK property market has been on the rise, led by the government temporarily cutting stamp duty. The biggest savings of up to £15,000 ended on 30 June, but buyers in England and Northern Ireland were able to save up to £2,500 if they bought a home before the end of September. Transaction numbers peak around stamp duty deadlines The number of houses being sold rose significantly during the tax holiday, with peaks in June and September as buyers sought to get transactions over the line in time to save on tax. Provisional data from HM Revenue and Customs (HMRC) shows that 165,720 sales went through in September, up 67% on August’s figure, but considerably fewer than the number recorded in June.
We are now getting a clearer picture of the impact that coronavirus has had on house prices, but continued uncertainty over what will happen next with the pandemic means figures could continue to fluctuate.
The most reliable measurement of house prices is the Land Registry’s UK House Price Index, which is based on sold property prices. It works on a two-month delay, so the latest available figures are for August. The Land Registry says that the average price of a property in the UK rose by 10.6% year-on-year in August to reach £264,244
Prices remain high due to lack of supply
The recent rise in demand from buyers hasn’t been met by a flurry of new properties coming on to the market, and this imbalance could keep prices high in the coming months. Nathan Emerson of the estate agency group Propertymark says: ‘The market has continued to see an imbalance of supply and demand, with our most recent housing report revealing an average of 19 buyers for every available property on the market. ‘We remain in a strong seller’s market, which will impact house prices as buyers bid to secure their dream home despite the end of the stamp duty holiday. Interest rates also remain low, which helps with the short-term affordability of higher purchase prices. ‘Lifestyle changes are still prevalent, and buyers are now looking to a future which is very different from the one they envisioned two years ago. The search for green space, home offices and more flexible living is a trend that is unlikely to diminish before the new year.’
Source: Which Magazine,HMRC, Rightmove,Zoopla,Land Registry & Propertymark