While many property industry experts predicted the market would ease up slightly after the end of the first phase of the stamp duty holiday in June, it’s encouraging to see the market is still healthy. Halifax has reported a small price increase for July.

Although Nationwide’s house price index showed a small 0.5 per cent dip in house prices for July, Halifax released its own house price index on 6th August showing a small rise of 0.4 per cent for the same month. A house price index from a lender relates to the number of mortgage approvals that lender has agreed in a certain timeframe, which is why figures vary among lenders. Halifax has seen a 2.4 per cent increase in the last quarter and an annual increase of 7.6 per cent.

‘House prices rose by 0.4 per cent in July to add £1122 to the cost of the average property,’ says Russell Galley, managing director of Halifax. ‘Recent months have been characterised by historically high volumes of buyer activity, with June the busiest month for mortgage completions since 2008. This has been fuelled by the race for space and the time-limited stamp duty break. With the latter now entering its final stages, buyer activity should continue to ease over the coming months, and a steadier period for the market may lie ahead.’

Buyer demand

Halifax has acknowledged the limited number of properties for sale compared to buyer demand. ‘Latest industry figures show instructions for sale are falling and estate agents are experiencing a drop in their available stock,’ adds Galley. ‘This general lack of supply should help to support prices in the near-term, as will the exceptionally low cost of borrowing and continued strong customer demand.’

Figures from Halifax showed that annual house price inflation is now at 7.6 per cent compared to 8.7 per cent in June and the average house price is now £261,221. This figure is slightly below May’s peak of £261,642 but is still more than £18,500 higher than a year ago. Wales has recorded the highest house price growth since 2005, with annual growth of 13.8 per cent.

Improved confidence

While there may be some uncertainty about the future of the property market when the furlough scheme ends in September, Halifax has pointed out that the lifting of restrictions is leading to improved confidence. ‘Although there remains some uncertainty over the impact on employment from the unwinding of government support schemes, on balance the risks to the macro-environment (external forces) are receding, with consumer confidence improving, the labour market recovering and the economy expanding as restrictions are lifted,’ says Galley. ‘Overall, assuming a continuation of recent economic trends, we expect the housing market to remain solid over the next few months, with annual house price growth continuing to slow but remaining well into positive territory by the end of the year.’

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