Search Acumen comments on ONS’s September 2020 House Price Index

Andy Sommerville, Director at Search Acumen, comments on ONS’s September 2020 House Price Index, published by the Office for National Statistics.

ONS HPI, September 2020: Prices for new-builds rise 0.1% over the last month, increasing to £286,856 in July 2020, up marginally from £286,659 in June 2020.

Andy Somerville commented:

“This latest data shows that the recovery in house prices is spreading across different types of properties, with new builds experiencing a slight uplift.

“Price rises for new builds have been mainly driven by prospective buyers rushing to secure the financial benefits on offer through the higher Stamp Duty threshold. The marginal savings the holiday offers may have been enough to trigger consumers to bring purchases forward considerably.

“Concentrated activity in the new build segment of the market may have also been supported by people taking advantage of the Help to Buy scheme before it is closed off to second-time buyers in March 2021.

“Going forward, changing consumer preferences are likely to reduce demand for new builds due to these properties often being flats located in cities. Greater adoption of remote working may drive the traditional new build buyer base of young professionals towards larger properties with access to green space.

“Severe headwinds facing the UK economy may dampen activity in the new build market in the medium term. Lenders are reacting to further anticipated economic disruption by continuing to rein in high loan-to-value products and reducing their exposure to borrowers with access to little housing equity or smaller deposits. This is likely to pose a barrier to entry for first-time buyers.

“To better understand the changing landscape, improving access and the quality of data available to developers is crucial. Consuming data earlier in the development process would help builders more easily meet a 28 day turn around. This should increase confidence in the market and boost the supply of new build housing across the UK.”

Kindly shared by Search Acumen

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