Despite the largest recession for three centuries, the UK housing market has, remarkably, continued to thrive. The huge economic uncertainty created by the pandemic hasn’t, it seems, deterred people from following their dream and buying a new home. In fact, the average house price has increased nearly £30,000 in the past year. But recent stats reveal the Uk housing market might be starting to slow down…
What the stats show
Mortgage lender Halifax revealed that in July, UK house prices grew at the slowest pace for four months. They grew 7.6 percent year-on-year, compared to 8.7 percent growth year-on-year the previous month. The average house price now sits at £261,221, with the highest increases in Wales (13.8 percent) and the lowest in London (2.5 percent). Halifax predicts that the rate of growth will further slow in the coming months.
An end to the stamp duty holiday
One of the key reasons why house prices have risen so rapidly during the pandemic is a government decision to give buyers a break from paying stamp duty. This is a set tax normally paid for any property worth more than £125,000. In an effort to keep the property market going, the government waived this tax on first-purchase properties in England and Northern Ireland worth less than £500,000. But this ‘tax holiday’ finished at the end of June and is thought to be why the market has slowed and will continue to do so.
There’s still cash out there
Economists are keen to point out that while the rate of growth might slow down in the coming months, the housing market is still expected to grow. There are several reasons for this, including a huge demand for houses compared to the number of homes for sale, low borrowing costs and the government offering support for buyers. It shows that the stamp duty tax break has been far from the only reason people have been choosing to move house.
It also means many of us will be uprooting and moving up and down the country over the coming months. If this is you, then make sure you’re fully prepared with the likes of surveyors, solicitors and the all-important man with a van at the ready because you don’t want to be the one holding up the chain in a fast-moving environment. If the housing market continues to thrive, albeit at a slower pace, then these people will be in high demand, and leaving it until the last minute to book them could be costly.
Despite the news that a little momentum has been lost when it comes to increasing house prices, no-one seems to be panicking. In fact, the overwhelming feeling is one of confidence that the upcoming months are still looking rosy for the UK housing market.
