Britain’s housing market is enjoying a post-lockdown mini-boom fuelled by this month’s stamp duty cut, pushing asking prices to a record high, according to the property website Rightmove.
With homes throughout Britain finally able to come to market again, some estate agents are reporting that buyer inquiries “are through the roof”, with property deals going to sealed bids, as a combination of pent-up demand being released, homeowners rethinking their lifestyles and the stamp duty giveaway come together to create a surge in activity.
“Britain is getting moving again,” said Rightmove. Its latest figures show that the average price of a property coming on to the market in Britain reached £320,265 this month – the highest figure since the site started its report in 2001. This was up 2.4%, or more than £7,000, on the previous record of £312,625 reported in March, just before the housing market was put on hold.
However, the increase in London since March was a lot lower – 0.5% – which may reflect reports that some potential homebuyers are plotting a move away from the capital to a smaller town or rural area as they rethink their priorities in the wake of the coronavirus pandemic.
Overall, inquiries from potential buyers were up 75% year on year in Britain, according to the website, which said it expected this activity would increase even further, as Scotland’s market had not yet been open for a full month, and Wales still had some restrictions in place.
Rightmove claimed that the immediate effect of the £3.8bn stamp duty giveaway unveiled by the chancellor, Rishi Sunak, on 8 July had been to “amplify the buyer surge”.
The stamp duty holiday means buyers of homes up to a value of £500,000 in England and Northern Ireland pay no stamp duty until 31 March 2021, with a reduced rate for homes above that. For someone buying a £500,000 home, the saving is worth £15,000.
Rightmove’s new data covers England, Scotland and Wales in the period from 7 June to 11 July, and a spokesman said the number of home sales agreed during the five days after Sunak’s announcement – between 8 and 12 July – was up 35% on the same period a year ago. This is more than double the 15% increase recorded in June.
Physically distanced property viewings restarted in England on 13 May, and in Northern Ireland and Scotland last month. In Wales, the property market partially reopened on 22 June.
Miles Shipside, a Rightmove director and its housing market analyst, said: “The unexpected mini-boom continues to gather momentum as more nations reopen.
“The busy-until-interrupted spring market has now picked up where it left off and has been accelerated by both time-limited stamp duty holidays and by homeowners reappraising their homes and lifestyles because of the lockdown.”
Earlier this month, the Halifax reported that UK house prices fell by 0.1% in June, but Rightmove claimed that its figures were the earliest indicator of current house price trends and “will be reflected in the coming months in other house price reports”.
Shipside also noted that the 3.7% annual rate of price growth was the highest it had recorded since December 2016.
Martin Walshe, director at estate agent Cheffins in Cambridge, said: “We’re as busy as we have been at any time in the past five years, and demand is at such a level that we have had over 25 properties go to sealed bids in the past four weeks.”
Marc von Grundherr, director of London agent Benham & Reeves, said: “Prices are up, inquiries are through the roof and sales are being agreed like billy-o, and that’s even before the effects of the temporary stamp duty reprieve have had time to kick in.
“Prices will rise further as a consequence of this unprecedented demand – albeit somewhat fabricated by a chancellor determined to bolster the flagging economy via the property market.”
Separately, new data has revealed that the average monthly rent on a newly let home in Britain fell to £986 in June. This was down 0.7% on June 2019, when the figure was £992, and marked the first annual fall since February 2014, Hamptons International said.
London was worst hit, seeing a year-on-year fall in central boroughs that was much larger than the average: a record 7.4% (from an average of £2,790 to £2,584) as overseas students and other tenants deserted the capital during lockdown.
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