Thu 16 Sep 2021
House prices picked up by 7.6 per cent year-on-year in July, according to mortgage lender Halifax. Jeremy Leaf, principal of Jeremy Leaf & Co, told This is Money: ‘After a record-breaking June, the housing market is becoming accustomed to more ’normal’ levels of activity but still above what we would reasonably expect at this time of year. There is no serious price correction or steep fall in transactions as these figures bear out. Certainly, we are seeing that nearly all sales agreed before the stamp duty concession began to taper off are proceeding, and without price renegotiation. Available stock remains at low levels and this is continuing to support values, along with cheap mortgage rates.'
However, slightly older figures from HM Revenue and Customs show that house prices slumped by nearly two-thirds in June as activity cooled as the stamp duty holiday started tapering. Jeremy Leaf told Mail Online: ’These figures for the period just after the withdrawal of the full stamp duty holiday are perhaps better than expected although reflect what we have been seeing, that buyers were still keen to proceed with their purchases, even though they were saving less than they would have done before the end of June. The market is definitely calmer now, but many are taking advantage of staycations to keep in touch with market activity, with listings slowly beginning to rise again as prospective sellers return from holiday.'
These figures were challenged by the Office for National Statistics, which found that buyers rushing to complete their property transactions before the stamp duty holiday started winding down pushed house prices to a record high in June. Jeremy Leaf told The Times that there had been a rush to beat the beginning of the stamp duty taper but added the ONS report 'is a little dated so it doesn’t show that the predicted price correction immediately afterwards failed to materialise’. He added: ‘There are fewer but more serious inquiries now with most potential buyers displaying a steely determination to proceed, with existing transactions rarely renegotiated or failing to complete.’
Meanwhile, over at the Resolution Foundation, research found that the stamp duty holiday did not cause the housing boom over the past year, chiming with evidence that the market has not slumped now that it has been partially withdrawn. Jeremy Leaf told The Financial Times that the latest evidence from the market suggested ’the predicted price correction immediately after [the withdrawal of the stamp duty holiday] failed to materialise’.
Rightmove reports that asking prices fell for the first time this year. ‘A reversal was hardly unexpected after the government started to taper the stamp duty holiday at the end of June,' Jeremy Leaf told BBC News. ‘But when you drill down more deeply into the figures, you see more of what we are finding at the coalface, such as an improvement in demand for smaller houses and flats.’ He added in City AM: ‘Prices continue to be supported by a shortage of new homes and demand for greater flexibility as many come to terms with new hybrid work patterns.'
Property renovation has boomed, thanks to the stamp duty tax break and rising house prices. Jeremy Leaf told The Daily Telegraph that three- and four-bedroom homes were the best to flip.