The UK’s property market is bouncing back at a rate few could have predicted, with the easing of lockdown restrictions having a knock-on effect on property prices across the country. According to the latest figures published by Halifax, average house prices for July reached a new record high, a full 1.7% increase on the previous month.
The Halifax House Price Index showed an average property price for July of £241,604, compared to the £237,834 average recorded in June. This would also mean that average property prices for July were up an impressive 3.8% on the same months in 2019.
According to Russell Galley, managing director of Halifax, the sudden spike is indicative of a pent-up wave of demand being released in the wake of eased lockdown restrictions. In addition, the chancellor’s recent introduction of a temporary ‘stamp duty holiday’ is also credited with motivating sellers and buyers to take action.
Until March next year, the threshold at which homebuyers will be required to pay stamp duty has been increased to £500,000 in England and Northern Ireland. an increase that, according to the government, will significantly benefit at least 90% of all buyers during this time period.
Indefinite uncertainty
Mr. Galley stated that while an increase in activity had been expected as lockdown restrictions were eased, none had predicted such a dramatic spike.
“The latest data adds to the emerging view that the market is experiencing a surprising spike post-lockdown,” he said.
However, he also went on to warn that while things are starting to look better for the housing market, the sector must be braced for a period of on-going and potentially indefinite uncertainty.
“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.
Along with the long-term fallout of the COVID-19 crisis, the real estate sector in the United Kingdom is widely expected to be negatively impacted by Brexit. Particularly if the United Kingdom leaves the European Union without a deal—a prospect that is becoming increasingly likely, the repercussions for the UK economy as a whole could be devastating.