The post-lockdown housing market boom is showing signs of a significant slowdown according to a new forecast.
The prediction, from the quote website Reallymoving, shows that after a long bull run on the back of the stamp duty holiday, prices will swing into reverse by September with a small dip.
The analysis suggests that house prices in England and Wales will grow by an annual rate of 3.8 per cent by the end of this month, slowing dramatically to just 0.4 per cent by the end of August, and then falling back a small 0.12 per cent by the end od September.
Reallymoving’s figures are based on an analysis of 29,000 completed conveyancing quote forms which it says allows it to anticipate demand and thus price movements for the next three months.
Rob Houghton, the website’s chief executive, comments: “A slowdown in the remarkable rate of growth we’ve seen over the last few months was inevitable and looking ahead over the next three months, the data indicates that the market is softening which will be reflected in completed sales data heading into the autumn.
“With the influence of the Stamp Duty holiday now largely expired alongside early signs that buyer demand is returning to more normal levels, we can expect prices to follow suit and return to a more stable trajectory.
“Despite this period of readjustment, we believe the market will continue to perform well over the longer term. Working arrangements for many people are yet to be tested and finalised, with the rise in home-working no doubt continuing to drive home movers for some time to come.
“There will be a contingent of buyers who realised pretty quickly that rising prices were wiping out any tax savings and decided to hold off until the market cooled, who, along with First Time Buyers who largely didn’t benefit from the stamp duty saving, may decide to make their move later this year.”
Conveyancing quote volumes on Reallymoving’s website peaked in March at more than double the usual level and remained high in April but dropped by 13 per cent in May and a further 18 per cent in June, suggesting buyer demand is beginning to fall.
Reallymoving captures the purchase price buyers have agreed to pay when they search for conveyancing quotes through the comparison site, typically 12 weeks before they complete.