Stamp duty holiday changes came into effect last month
Average house prices in the UK rose 7.6% in July compared to a year earlier, but the rate of growth has slowed.
Mortgage lender Halifax says the average property price is currently £261,221.
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July’s figure is 0.4% higher than the previous month, when the annual growth rate was higher at 8.7%.
Changes to the stamp duty holiday came into force last month as they put buyers at a disadvantage.
However, Halifax says the housing shortage will likely continue to support home prices.
As has been the trend for much of the past decade, home price growth continues to easily outpace wage growth at 7.6%.
There are a number of factors that appear to have caused the dramatic rise in home prices despite the pandemic. First, borrowing costs are historically low. Second, there is pent-up demand after a temporary economic slowdown. Lockdown has created a desire in people to have more space. Finally, large government subsidies played their part.
Halifax Managing Director Russell Galley said:
“Recent months have historically been characterized by high buyer activity, with June being the busiest month for mortgage completions since 2008. This is due to ‘competition for space’ and time-limited stamp duty “The latter is now in its final stages, and buyer activity should continue to ease over the coming months, suggesting a more stable period for the market.” Mr. Galley said.
“The latest industry figures show that sales orders are falling and estate agents are facing reduced inventory. This overall short supply is due to exceptionally low borrowing costs and continued strong customer demand, as well as exceptionally low borrowing costs and continued strong customer demand. This will support prices in the short term.”
