Housing market to stay strong in 2022 says buoyant Halifax
Housing market to stay strong, as house prices rose by the most in almost 15 years in September ahead of the end of the stamp duty holiday.
The Halifax says prices rose 1.7 per cent from August, the biggest monthly rise since February 2007. In annual terms, house price growth also accelerated to 7.4 from 7.2 per cent.
Russell Galley, Halifax’s managing director, says:
“The price of an average house is now as expensive as it has ever been, standing at just over £267,500.
“While the end of the stamp duty holiday in England – and a desire amongst homebuyers to close deals at speed – may have played some part in these figures, it’s important to remember that most mortgages agreed in September would not have completed before the tax break expired. This shows that multiple factors have played a significant role in house price developments during the pandemic.
“The ‘race-for-space’ as people changed their preferences and lifestyle choices undoubtedly had a major impact.
“Looking at price changes over the past year, prices for flats are up just 6.1 per cent, compared to 8.9 per cent for semi-detached properties and 8.8 per cent for detached. This translates into cash increases for detached properties of nearly £41,000 compared to just £6,640 for flats.
“Against a backdrop of rising pressures on the cost of living and impending increases in taxes, demand might be expected to soften in the months ahead, with some industry measures already indicating lower levels of buyer activity. Nevertheless, low borrowing costs and improving labour market prospects for those already in employment are likely to continue to provide support.
“Perhaps the biggest factor in determining the future of house prices remains the limited supply of available properties. With estate agents reporting a further reduction in the number of houses for sale, this is likely to underpin average prices – though not the recent rate of price growth – into next year.”
Agents have naturally reacted well.
Jeremy Leaf, north London agent and former RICS residential chairman, says:
“Although reflecting some historical buying and selling, the housing market continues to demonstrate remarkable resilience bearing in mind the number of transactions brought forward in the last few months to take advantage of the stamp duty holiday.
“Nevertheless, we are finding activity has lost some oomph but there is still plenty of life left, supported by record low interest rates and supply, while though rising, is not doing so fast enough. The market also seems to be shrugging off rising inflation and the end of furlough, as well as widening economic concerns.”
James Forrester, managing director of Barrows and Forrester in the Midlands, comments:
“Although the second phase of the stamp duty holiday continued to offer a notable saving for a great deal of homebuyers, we simply didn’t see the same mass panic to complete ahead of the deadline that had previously gripped the market. So it’s unlikely that the buoyant conditions we’re still seeing are solely a result of the holiday itself.
“While there will no doubt be some form of erratic price movement on a month to month basis until the market settles down for good, we don’t expect the removal of this tax incentive to significantly impact the market at any level.”
Iain McKenzie, chief executive of the Guild of Property Professionals, adds:
“The popular tax break was not the sole factor driving prices upwards, and buyer demand is likely to remain solid through the autumn.
“With the price increases for semi-detached and detached houses far outstripping the rise seen in flats, it’s clear that the ‘race for space’ is still ongoing. The picture is mixed for the months ahead, but low borrowing costs and continuing limited supply of properties to the market mean that prices are likely to keep rising.”
Marc von Grundherr, director of Benham and Reeves in London, sees it this way:
“The London market has been waiting patiently in the shadows watching manic levels of activity play out across the rest of the UK. The higher price of property has long seen many London homebuyers disregard the importance of the stamp duty holiday, particularly since the price threshold was reduced.
“However, we’ve seen a far more natural level of momentum building across the market and this looks set to snowball during the autumn and winter months. As a result, our money is on London to finish the year with the most impressive performance where house price growth is concerned.”
Kindly shared by Estate Agent Today
Main article photo courtesy of Pixabay