Property market has ‘highest house prices ever’ as stamp duty freeze sparks ‘mini boom’

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The property market has slowly started up again as coronavirus lockdown restrictions continue to ease. The government cuts to stamp duty have helped the housing market bounce back as house prices have been sent “rocketing”.

In July, chancellor Rishi Sunak announced a temporary holiday on stamp duty until March 31, 2021.

The price freeze applies to the first £500,000 of all property sales in England and Northern Ireland.

The Halifax HPI said buyers seem to be taking advantage of the discount as demand has surged.

House prices saw a mini boom as they jumped by 1.6 percent on prices from June.

Managing director of Halifax Russell Galley said: “Following four months of decline, average house prices in July experienced their greatest month on month increase this year, up 1.6 percent 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 percent higher than a year ago.”

The report explained the “highest prices ever” could be down to the cut in stamp duty and this has made the housing market appear promising.

He continued: “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.”

Property experts have commented on the increase and explained buyers are now in a “purchasing frenzy”.

Director of property investment company Track Capital Tobi Mancuso said: “The housing market has been on a rollercoaster of ups and downs in the last few months, but the stamp duty freeze has sent prices rocketing.

“June saw the average UK house prices decrease by 0.1 percent followed by a 1.6 percent increase in July as chancellor Rishi Sunak’s move sent buyers into a purchasing frenzy causing a mini boom.”

With many lockdown restrictions being lifted, the expert explained many will be looking for a new property.

Tobi added: “Lockdown has given thousands of cooped-up home-owners time to look around and realise they need more space, and we’re seeing some of that pent-up demand released now along with investors looking to put their money into the more stable asset class of property.

“We’re expecting a busy month as buyers stay home instead of jetting off abroad and use their time here to shop for new properties.”

While the market is looking promising right now, the Halifax HPI showed that its future could still be uncertain.

Russell added: “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.”

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