The July 2020 House Price Index published by Halifax

The July 2020 House Price Index published by Halifax shows a sharp increase in July pushed house prices to the highest ever levels.

Headlines:

• Mini-boom drives house prices up in July to 1.6% higher than in June, on a monthly basis
• In the latest quarter (May to July) house prices were 0.2% lower than in the preceding three months (February to April)
• House prices in July were 3.8% higher than in the same month a year earlier
• Uncertainty remains with likely greater downward pressure on prices in the medium term

Russell Galley, Managing Director, Halifax, said:

“Following four months of decline, average house prices in July experienced their greatest month on month increase this year, up 1.6% from June and comfortably offsetting losses in 2020. The average house price in July is the highest it has ever been since the Halifax House Price Index began, 3.8% higher than a year ago.

“The latest data adds to the emerging view that the market is experiencing a surprising spike post lockdown. As pent-up demand from the period of lockdown is released into a largely open housing market, a low supply of available homes is helping to exert upwards pressure on house prices. Supported by the government’s initiative of a significant cut in stamp duty, and evidence from households and agents suggesting that confidence is currently growing, the immediate future for the housing market looks brighter than many might have expected three months ago.

“However, looking further ahead, there is still a great deal of uncertainty around the lasting impact of the pandemic. As government support measures come to an end, the resulting impact on the macroeconomic environment, and in turn the housing market, will start to become more apparent. “In particular, a weakening in labour market conditions would lead us to expect greater downward pressure on prices in the medium-term.”

Key facts – housing activity

• HMRC Monthly property transactions data shows a rise in UK home sales in June. UK seasonally adjusted residential transactions in June 2020 were 63,250 – up by 31.7% from May following the lifting of COVID-19 lockdown measures. Quarter-on-quarter transactions were approximately 47% lower than quarter one 2020. (Source: HMRC, seasonally-adjusted figures)
• The number of Mortgage approvals to finance house purchases from the Bank of England in June was 40,010, following the low of 9,273 in May due to the lockdown measures in place for COVID-19 (this represents a 331% month on month rise). The June figure brings the quarter two total to 65,139 – down 68% from the previous quarter and also down 67% from the same period the previous year. (Source: Bank of England, seasonally-adjusted figures)
• Results from the latest (June 2020) RICS Residential Market Survey point to a recovery emerging across the market, with indicators on buyer demand, sales and new listings rallying following the lockdown related falls. New buyer demand has moved to a net balance of +61% (compared to -7% and -94% in April and May respectively). New instructions also rose firmly to a net balance of +42% (compared with -22% in May). Newly agreed sales net balance has moved into positive territory for the first time since February, with a net balance of +43% (from -34% in May). (Source: Royal Institution of Chartered Surveyors’ (RICS) monthly report)

Kindly shared by Halifax

Main article photo courtesy of Pixabay