House prices soar 6.5% since June as stellar property gains outweigh stamp duty savings on some homes, Halifax says
- Average house prices rose 1.2%, or around £3,000, in the month of November
- Annual growth at 7.6%, the fastest rate since June 2016
- Stamp stamp duty saving of £2,500 on a home costing £250,000 are now ‘far outweighed’ by the average increase in house prices since July
Average house prices have risen by more than £15,000 since June and £3,000 in the last month alone, ‘far outweighing’ stamp duty savings on some cheaper properties, mortgage lender Halifax said today.
Its latest monthly house price index – which is based on mortgage approvals rather than actual sales prices – shows the price of an average UK home jumped 1.2 per cent in November to £253,243.
Compared to November last year, prices have risen 7.6 per cent, the fastest rate of growth in over four years – since June 2016. And the Halifax data suggests valuation have soared by a hefty 6.5 per cent since June.
Booming market: Average house prices have risen by more than £15,000 since June and £3,000 in the last month alone, according to the latest index by mortgage lender Halifax
Halifax’s managing director Russell Galley noted that the stamp duty saving of £2,500 on a home costing £250,000 are now ‘far outweighed’ by the average increase in house prices since July.
Chancellor Rishi Sunak slashed stamp duty on home purchases up to £500,000, with potential buyers looking to save a maximum £15,000 thanks to the cut.
But Nicky Stevenson of estate agent group Fine & Country said Halifax’s reading should be taken with a pinch of salt, as the index is based on mortgage approvals, not actual sale prices.
‘Timetable pressure to complete before the stamp duty holiday closes at the end of March is mounting and many of the offers that underpin these numbers will not in fact take place,’ he said.
‘There’s still plenty of time before exchange for chains to suffer a misstep, pushing sales into April. This will force many of those who raised offers in haste to seal deals to scrutinise those valuations again,’ he added.
The price of an average UK home jumped 1.2 per cent in November to £253,243
‘That said, there’s no doubt the market has been running a little riot lately and, on paper at least, the average hike in prices since the stamp duty holiday was introduced now eclipses the saving available.’
Many home buyers have been rushing to buy to beat the stamp duty holiday deadline on 1 April 2021, resulting in mortgage approvals hitting a 13-year high last month.
According to estate agents, the mini-boom in the property market is also driven by a certain demographic searching for larger houses with outside space where they can work from home.
Galley said the housing market has proved more resilient than expected at the start of the pandemic, but warned that a slowdown was likely over the next year as unemployment rises.
‘With mortgage approvals at a 13-year high, the current market continues to be shaped by a desire for more space, the move from urban to rural locations and indications of a trend for more home working in the future,’ he said.
‘And while industry data shows agreed sales and new instructions to sell fell to their lowest level in the past five months, both remain at historically high levels and well above seasonal norms.
‘However, the economic environment continues to look challenging. With unemployment predicted to peak around the middle of next year, and the UK’s economy not expected to fully recover the ground lost over 2020 for a number of years, a slowdown in housing market activity is likely over the next 12 months.’
