New figures from Halifax suggest that the clamour to claim stamp duty relief before the September deadline shows no sign of abating. As a result, a major spike in demand for desirable properties in key regions has resulted in a huge 8.2% average house price increase within the past 12 months.
This means that the average price of a home in the UK is now £20,000 higher than it was at the same time last year, the fastest rate of growth recorded in five years.
Market watchers have since commented that the momentum is being driven by widespread fear of missing out and a collective desire among movers and first-time buyers to capitalise on the temporary stamp duty holiday.
In addition, the fact that average house prices are climbing so quickly is spurring many to take action as promptly as possible, due to fears of prices becoming insurmountable later in the year.
The report published by Halifax indicated a 1.4% increase in average house prices between March and April, taking the average price of a UK home to a new record high of £258,204.
Ongoing house price growth is predicted
When Chancellor Rishi Sunak announced the initial stamp duty holiday that was scheduled to expire at the end of March, it triggered a major spike in real estate market activity. The same also occurred when the Chancellor confirmed the extension of the stamp duty holiday to September, under a policy that will see some relief for buyers come to an end as early as June.
“The stamp duty holiday continues to add impetus to an extremely active market, magnifying the current shortage of available homes as buyers aim to take advantage of the government scheme,” said Russell Galley, managing director at Halifax.
Experts had predicted that the initial impact of the stamp duty holiday would gradually fade over the course of Q2, but the scarceness of affordable inventory coupled with rock-bottom interest rates is continuing to fuel the real estate market across the UK.
Speaking on behalf of James Pendleton Estate Agents, analyst Lucy Pendleton said that there were no immediate indications of a slowdown on the horizon.
“This market isn’t standing still for a second,” she commented.
“The feeding frenzy for property was already feeling pretty ferocious, but then along comes another big leap in the annual rate of [house price] growth.”
She said the current state of the market means timing is crucial for buyers, and not wasting time is essential.
“In a blazing hot seller’s market like this, most buyers don’t even compare prices locally to make their offer; they work out what they can afford, and they go for it.”
Her sentiments were echoed by the managing director at estate agent Fine & Country, Nicky Stevenson, who warned that the UK property market in its current state is not for the faint-hearted.
“Buyers need to be incredibly determined to succeed in a market like this,” she said.
“This won’t be the last record high we’ll see this year by a long stretch.”