Pent up demand and stamp duty holiday push up prices ...

Agents have been understandably delighted at the latest Halifax index which shows house prices posting their biggest gain of the year in July.

Average house prices rose 1.6 per cent in the month to a typical £241,604; over the course of the past year, that means prices are up 3.8 per cent.

“Confidence is currently growing, the immediate future for the housing market looks brighter than many might have expected three months ago” says Halifax managing director Russell Galley.

But he cautions: “Looking further ahead, there is still a great deal of uncertainty around the lasting impact of the pandemic. A weakening in labour market conditions would lead us to expect greater downward pressure on prices in the medium-term.”

Leading agent Jeremy Leaf, a London agency owner and former RICS residential faculty chairman, says he’s pinching himself at the ongoing high demand thanks to the stamp duty holiday and pent-up activity following lockdown. “The increase in new listings is particularly welcome as it is providing more choice to buyers and helping keep prices in check” he comments.

Sam Hunter, chief operating officer of portal Homesearch, says: “Speaking to agents in our network across the country, everyone on the ‘front lines’ knew this was going to happen from the conversations they had with their markets during lockdown … A sure sign of a positive market is a shortage of stock, not caused by lack of seller confidence but as a consequence of supply not keeping pace with demand. We’re hearing this message repeated often, along with realistic asking prices being achieved with little or no negotiation, in many cases as a result of competitive bids.”

And Lucy Pendleton, of London agency James Pendleton, adds: “It's noticeable that offers coming in now are sensible rather than optimistic. There is clearly a desire to get the transaction done, and move or sell, and that will hopefully keep the market flowing in the short-term at least. “We are now entering what is typically a quiet period for the property market. But with most of the country taking a staycation this year, we expect activity to be strong throughout August.”