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House price growth set to slow as stamp duty holiday ends

The property market is unlikely to enter a last-minute rush before the final stamp duty holiday ends in October, research claims.

Analysis based on conveyancing quotes on Reallymoving.com suggested house prices are set to rise by just 0.7 per cent over the next three months with the strongest gains in October as the stamp duty holiday on purchases up to £250,000 ends.

The research claims that house prices will dip marginally in September by 0.5 per cent as a result of deals agreed in June when buyers were forced to factor in the cost of paying stamp duty once again, constraining budgets.

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However, this dip was short-lived with prices agreed between buyers and seller rising again once the initial stamp duty holiday deadline passed in July.

The analysis said this was likely to be in part due to limited supply of new properties coming onto the market creating greater competition for homes.

When those deals complete in October, prices will rise by 1.3 per cent before flattening out to 0.1 per cent in November when the average house price will be £341,492.

Rob Houghton, chief executive of Reallymoving, said: “The rate of house price increases over the last year has been remarkable but it’s been a difficult period for first time Buyers and we welcome a return to more stable levels of growth.

“The housing market is in good shape heading into the autumn as the impact of the stamp duty holiday works its way out of the system, demand returns to more normal levels and once again the market proves its underlying resilience.

“Competition among cash-rich mortgage lenders has reduced borrowing costs to record lows, alongside a strong economic recovery and jobs market – all of which are boosting consumer confidence and prompting people to make their move now and take advantage of five-year fixed rate deals available at less than 1 per cent.

“While interest rates stay low and supply remains constrained, despite monthly fluctuations the overall market trend will be steadily upwards.”

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