Sales market ‘defies gravity’ once again despite end of Stamp Duty holiday

Halifax figures reveal 1.7% rise in house prices during September when most purchases wouldn't have completed in time to catch SDLT zero-rate.

Halifax house prices

Fears that the sales market would ‘fall off a cliff’ once the stamp duty holiday ended have proved to be unfounded after the Halifax today revealed a 1.7% monthly rise in house prices last month.

The figure, which would be extraordinary for September in any year, shows that the average UK house price has hit a record high of £267,587 and that annual house price inflation is currently running at 7.4%. Its figures also show the ‘race for space’ is still on – with competition for houses much higher than for apartments.

Halifax MD Russell Galley says this monthly growth rate is the highest since February 2007.

“While the end of the stamp duty holiday in England – and a desire amongst homebuyers to close deals at speed – may have played some part in these figures, it’s important to remember that most mortgages agreed in September would not have completed before the tax break expired,” he says.

“This shows that multiple factors have played a significant role in house price developments during the pandemic.

“Against a backdrop of rising pressures on the cost of living and impending increases in taxes, demand might be expected to soften in the months ahead, with some industry measures already indicating lower levels of buyer activity. Nevertheless, low borrowing costs and improving labour market prospects for those already in employment are likely to continue to provide support.”

Industry reaction

Link to recruitment newsNicky Stevenson, MD of Fine & Country, adds: “A reality check has been forthcoming — it’s just not the one anyone was expecting.

“House price growth has accelerated just as the market’s crutches have been taken away. This is the exact opposite of what logic dictated should have happened in September and tells you the rally isn’t over yet.

“The housing market has hurtled into what had been widely billed as a period of adjustment but its reaction has defied gravity yet again.

Link to Stamp Duty featureIain McKenzie, CEO of The Guild of Property Professionals, says: “After three months of slowing house price growth, we saw an unexpected uplift in September despite the end of the stamp duty holiday.

“This shows that the popular tax break was not the sole factor driving prices upwards, and buyer demand is likely to remain solid through the autumn.

“With the price increases for semi-detached and detached houses far outstripping the rise seen in flats, it’s clear that the ‘race for space’ is still ongoing.

“The picture is mixed for the months ahead, but low borrowing costs and continuing limited supply of properties to the market mean that prices are likely to keep rising.”

Lucy Pendleton, James Pendleton, imageLucy Pendleton (pictured) of London agency James Pendleton, says: ““The market has delivered a record high just as the stool was being kicked away. It also did it in some style. The last time we saw monthly price growth like this, Tony Blair was Prime Minister.

“For all the talk of this rally slowing, it’s still right up there with some of the most bullish markets on record.


One Comment

What's your opinion?

Back to top button