Prices rocketed 3.8 percent year-on-year in July to hit the record. Property experts knew the Chancellor’s cut in stamp duty was a shot in the arm for the struggling sector after it was frozen during lockdown. But they were surprised by the spike in house prices. Announced at beginning of last month and running until next March, buyers of homes worth up to £500,000 will save as much as £15,000.
It has persuaded buyers and sellers in all areas to flock back to the property market, rejuvenating the sector.
The cost of a three-bedroom semi jumped by 1.6 percent – or £3,770 – month-on-month to £241,604. This is up from £237,834 in June.
Russell Galley, managing director of Halifax, said: “Following four months of decline, average house prices in July experienced their greatest month-on-month increase this year, comfortably off-setting losses in 2020.
“The average house price in July is the highest it has ever been since the Halifax house price index began in 1983.
“The latest data adds to the emerging view that the market is experiencing a surprising spike post-lockdown.”
Chief Secretary to the Treasury Stephen Barclay said: “Buying a home is the biggest financial investment most people will make in their lives and we want people to feel the economy is secure enough for them to take this step.
Chancellor of the Exchequer Rishi Sunak
“A secure home is one of the most important things in life. And so is job security. So what’s great about the stamp duty cut that we announced in July – raising the threshold to £500,000 – is that it helps with both of these priorities we all share.”
Islay Robinson, chief executive of Enness Global Mortgages, said: “The stamp duty holiday has been the property market equivalent of Black Friday, bringing a massive influx of buyers who may otherwise have been sat on the fence until next year.
“It isn’t just the average home buyer that’s hitting the market for a discounted spending spree either.
“Demand has spiked at all tiers with high-end and foreign buyers also scrambling to secure themselves a deal.
“The off-shoot of this is a rebound in property price growth and, with the cost of borrowing remaining very favourable, it’s unlikely to let up anytime soon.”
James Forrester, managing director of estate agent Barrows and Forrester, added: “The stamp duty holiday has acted as a property market vaccine against pandemic-based apprehension. While a relatively short-term fix to a potentially long-term issue, it allows us to traverse the traditionally quieter periods of Christmas and the start of a new year, at which point the worst should hopefully be behind us.
“The stamp duty holiday has helped kickstart the market and rescued it from the depths of pandemic decline.”
The housing market has gradually been reopened after restrictions were imposed earlier this year as part of the coronavirus response.
Monthly property transaction data from HMRC shows a rise in UK home sales in June.
Mortgage offers were also up, according to Bank of England figures.
The number of approvals in June was 40,010, following the low of 9,273 in May – a 331 percent month-on-month rise.
And results from the latest poll of surveyors point to a recovery emerging across the market.
Buyer demand, sales and new listings all rallied following lockdown-related falls, said the Royal Institution of Chartered Surveyors.
New buyer demand has moved to a balance of +61 percent compared to -7 percent and -94 percent in April and May respectively.
And newly agreed sales figures have moved into positive territory for the first time since February, with a net balance of +43 percent, from -34 percent in May.
Jeremy Leaf, a London estate agent and former residential chairman of the RICS, 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.
“Looking forward, we are being told the housing market revival will be tested by rising unemployment and the imminent end of the furlough scheme. But there’s not much evidence of a slowdown at the moment.”
David Westgate, chief executive at Andrews Property Group, said: “Continued low supply, exceptional post-lockdown demand and the stamp duty cut have injected a real energy into the market.
“We expected a rebound when the country emerged from lockdown but not one this pronounced.
“In some areas prices are edging up given the sheer volume of demand. Everyone home loan approvals between May and June knows that there is a significant amount of economic uncertainty ahead, but for now the property market is firing about as well as it could.” However, Miles Robinson, head of mortgages at online broker Trussle, pointed to the difficulties faced by first-time buyers as they struggle to get on the housing ladder.
He said: “It’s important to consider that rising house prices may be positive for the market, but some groups of home buyers will not necessarily see this as good news.
“First-time buyers are facing challenging times. Many may feel locked out of the market.”