At Stones Residential, we know these are interesting times in the housing market. We want you to make an informed decision as best we can, and it is also helpful to stay in touch with the Nationwide’s House Price Index.
The key takeaways from the recent Nationwide figures are:
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Annual house price growth remained in double digits, but fell back to 10.5%
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Prices down 0.5% month-on-month
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Stamp duty changes impacting market dynamics
Robert Gardner, Nationwide's Chief Economist, said; “Annual house price growth slowed to 10.5% in July, from the 17-year high of 13.4% recorded the previous month. In month-on-month terms, house prices fell by 0.5%, after taking account of seasonal effects, following a 0.7% rise in June. The modest fallback in July was unsurprising given the significant gains recorded in recent months. Indeed, house prices increased by an average of 1.6% a month over the April to June period – more than six times the average monthly gain recorded in the five years before the pandemic.”
The end of stamp duty holiday will impact market
Robert continued by saying; “The tapering of stamp duty relief in England is also likely to have taken some of the heat out of the market. The nil rate band threshold decreased from £500,000 to £250,000 at the end of June (it will revert to £125,000 at the end of September). This provided a strong incentive to complete house purchases before the end of June, especially for higher priced properties. For those purchasing a property above £250,000, the maximum stamp duty saving reduced from £15,000 to £2,500 after the end of June.”
Charlotte Nixon, mortgage expert at Quilter spoke about the recent changes in the market, saying; “The predicted cooling of the market is finally upon us as prices dropped by a further 0.5% in July although they are coming down from a very high base so still remain inflated. With the stamp duty holiday set to completely go in a matter of weeks this downward trend is likely to continue into the autumn and may drop even further come winter. Dropping infection levels and an economy which is slowly getting back on its feet may help to steady the ship and prices will reduce at a slower pace than originally predicted but we are unlikely to see anything like the same rush to the market like we have this year following the stamp duty holiday announcement.”
Demand will remain in place in the housing market
Charlotte continued by saying; “However, that does not mean that demand will completely dry up. People have got a completely different perspective on their working and home lives following the lockdowns and priorities have changed. The draw of big cities is still there but our clients are happy to live a bit further out for added extras like a home office or a garden. The impact of the pandemic is likely to impact our taste in housing for the foreseeable future and previously unloved locations may still see significant increases in price as they become more accessible to white collar workers previously chained to the office.”
Charlotte concluded by saying; “While the worst of the pandemic may be behind us the economic legacy of it will remain for a number of years and this naturally will bleed into the housing market in some form or the other. How prices react in the long term is a guessing game but we can be fairly sure that the hyper inflated prices we have seen recently have got to reduce in the short term.”
If you would like to arrange an appointment to help you negotiate the local housing market, please contact Stones Residential today by calling us on 020 7483 0685 or emailing belsizepark@stonesresidential.co.uk.
