It has been a busy few weeks for the UK housing market, so we thought we would put together a brief summary of everything you need to know right now.
Halifax reports record house price gains for July
July saw average property prices reach new record highs. According to the latest Halifax House Price Index, average property prices reached £241,604 for July, an increase of 1.6% on the previous month and a full 3.8% higher than July last year.
“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,” commented Halifax’s managing director, Russell Galley.
“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.”
Pent-up demand and the chancellor’s temporary ‘stamp duty holiday’ have been credited with sparking this unprecedented monthly spike.
Rightmove share prices on the up
Record levels of housing market activity following the easing of lockdown restrictions have had a knock-on effect on Rightmove’s share prices.
According to the company’s chief executive, Peter Brooks-Johnson, Rightmove stock has surged more than 7% after more or less grinding to a halt during the national housing market shutdown. Welcome news for Rightmove shareholders, following a confirmed slump in operating profits of 43% for Q1 2020.
Investors are, it seems, apparently setting their sights on the long-term picture for the housing market, with the sector having shown signs of slowly but surely returning to strength.
Fewer construction jobs
Despite the fact that construction firms are experiencing the fastest rebound in activity recorded since 2015, the sector continues to record a reduction in employment. The latest figures suggest that one in every three construction companies in the UK reduced its employment rate over the past month.
A similar proportion indicated that they expect to continue hiring fewer employees for at least the next year. Both the coronavirus crisis and Brexit are being blamed for making property developers and construction companies apprehensive about making major hiring decisions or committing to new projects.
Property capital gains tax
Last up, the Social Market Foundation (SMF) has suggested the introduction of a new “property capital gains tax” to help plug the UK’s growing budget deficit.
The move would see all homeowners face a 10% tax payment on the increase in value of their home from the time they bought it to the date of its subsequent sale. According to the SMF, this could generate in excess of £421 billion within the next three decades as property prices across the UK continue to skyrocket.