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TODAY'S OTHER NEWS

It's a record! Latest index reports price rise after buoyant summer

House prices rose again in August to reach a record high level according to Halifax, which is part of the Lloyds Banking Group.

There was a 1.6 per cent rise in property prices over the month compared to July, taking the average UK price to £245,747 - this is 5.2 per cent higher than August 2019.

However Russell Galley, managing director of Halifax, warns this may not last: “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 amongst 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.

“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.”

Agents are also realistic about whether such strong market sentiment can go on.

“How long can this mini-boom continue? This is a question I am often asked and these figures provide some of the answers. They confirm what we have been seeing on the ground over the past month or so as buyers and sellers continue to shrug off the imminent yet inevitable worsening economic news” explains Jeremy Leaf, the London agency owner and former RICS residential chairman.

“We have noticed that there is no real sign of change yet although our viewing-to-offer ratio has dropped a little compared with last month, which is probably more to do with the summer holiday pause than a significant market correction.”

Housing analyst Anthony Codling, founder of PropTech platform Twindig, says: “I continue to be surprised at not just by the robustness of house prices but by the simple fact they are increasing at this rate in the face of such economic uncertainty. 

“My concern is that this is further evidence of a two-speed housing market where life carries on as normal for the property ‘haves’ but becomes increasingly difficult for the property ‘have-nots’. If the UK housing market is not open to all I fear that the recovery is being built on sand rather than rock."

Another PropTech leader - Ben Johnston, director of property app Houso - says what is really needed in the market is a boost in transaction volume. 

“This was the case before the pandemic as well, and it’s a shame that it took the world’s largest seismic shift for stamp duty to be cut, as had that move been made in ‘normal’ times, the market would have flown” he believes.

Meanwhile Mark Harris, the chief executive of mortgage broker SPF Private Clients, adds: “The demand for mortgages continues to be strong as borrowers take advantage of some competitively priced deals, particularly those with big deposits to put down. For first-time buyers, the situation is trickier with less choice of high loan-to-value products.”

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