House prices to fall as ‘true scale’ of coronavirus becomes clear despite record high

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The Halifax House Price Index found on a monthly basis, house prices in August were 1.6 percent higher than in July. House prices this month are 5.2 percent higher than in the same month a year earlier.

However, this data comes with a firm warning, as this peak is prices is due to a very specific reason.

It’s due to the market picking up once more after lockdown.

Various transactions are finally going through. Others have been left desperate to move by working from home conditions.

An expert from Halifax warned that eventually prices would fall down again, following the general downturn of the economy.

Russell Galley, Managing Director, Halifax, said: “House prices continued to beat expectations in August, with prices again rising sharply, up by 1.6 percent on a monthly basis.

“Annual growth now stands at 5.2 percent, its strongest level since late 2016, with the average price of a property tipping over £245,000 for the first time on record.

“A surge in market activity has driven up house prices through the post-lockdown summer period, fuelled by the release of pent-up demand, a strong desire among some buyers to move to bigger properties, and of course the temporary cut to stamp duty.

“Notwithstanding the various positive factors supporting the market in the short-term, it remains highly unlikely that this level of price inflation will be sustained.

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“The macroeconomic picture in the UK should become clearer over the next few months as various government support measures come to an end, and the true scale of the impact of the pandemic on the labour market becomes apparent.

“Rising house prices contrast with the adverse impact of the pandemic on household earnings and with most economic commentators believing that unemployment will continue to rise, we do expect greater downward pressure on house prices in the medium-term.”

Halifax’s report stated results from the latest (July 2020) RICS Residential Market Survey point to an ongoing recovery across the market.

There has been a rise in new buyer enquiries, as well has a rise in newly agreed sales.

So what does all this mean for Britons? What should they do with their property?

Expert Henry Pryor said: “My advice would be if you want to sell, get on, make the most of the post-lockdown bounce and find a buyer — even if this means having to rent before you buy somewhere else or delaying the completion date so you have time to look.

He told the Daily Mail: “But I wouldn’t be in any rush to buy.

“I’d wait to see what happens to prices later this year.”

If your are selling a property, how can you make sure you get the best deal from your estate agent. 

Admiral home insurance explained what sellers must do before committing to an agency.

The experts warned against signing up with an agent who is not open about fees.

Instead, Britons must ask questions to find an estate agent who is upfront about all potential costs.

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