House prices reached an all-time high in July, thanks to a post-lockdown “mini-boom” in the property market.
The average house price hit £241,604 last month, according to Halifax’s long-running House Price Index. The average price was 1.6% higher than in June and 3.8% higher than in July 2019.
“Following four months of decline, average house prices in July experienced their greatest month on month increase this year, up 1.6% from June and comfortably offsetting losses in 2020,” said Russell Galley, managing director at Halifax.
“The average house price in July is the highest it has ever been since the Halifax House Price Index began, 3.8% higher than a year ago.”
On a quarterly basis, prices were down just 0.2%.
Galley said the data pointed to a mini-boom in the property market, fuelled by pent up demand and a six month stamp duty freeze announced by chancellor Rishi Sunak last month.
“The latest data adds to the emerging view that the market is experiencing a surprising spike post lockdown,” Galley said. “As pent-up demand from the period of lockdown is released into a largely open housing market, a low supply of available homes is helping to exert upwards pressure on house prices.”
New buyer enquiries rose to the highest level since 2013 and the number of new listings and agreed sales also rallied strongly.
“The temporary nature of the stamp duty holiday has unsurprisingly encouraged many people to buy property,” said Anna Clare Harper, author of Strategic Property Investing.
“Throw six months’ worth of pent-up supply and demand and lockdown-led lifestyle changes into the mix, and, anecdotally, you have a frenzy in the housing market.”
Galley said the outlook for the house market was “brighter than many might have expected three months ago” but warned: “There is still a great deal of uncertainty around the lasting impact of the pandemic.”
“As government support measures come to an end, the resulting impact on the macroeconomic environment, and in turn the housing market, will start to become more apparent,” he said.
“In particular, a weakening in labour market conditions would lead us to expect greater downward pressure on prices in the medium-term.”
The government is also planning a radical overhaul of England’s planning system in a bid to speed up the building of new homes. If successful, the added supply could also weigh on prices.
“We don’t know how long this flurry of activity will continue, especially as the furlough scheme comes to an end, but for now things continue to move in the right direction,” said Mark Harris, chief executive of mortgage broker SPF Private Clients.
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