- 16th November 2020
- Posted by: DMM
- Category: Property Market Reports
Toady’s house price index from Rightmove has shown the average price of properties coming onto the market has dipped by 0.5% (-£1,505) from last month. This is despite ongoing strong buyer demand with new sellers rushing to beat the March stamp duty deadline.
Rightmove say that demand and activity compared with October last year are strongest in the price bands and regions where buyers are set to make the biggest stamp duty savings. National sales agreed are up 50% on October last year, and Rightmove now estimates there’s 650,000 sales going through the buying and selling process, 67% more than at the same time in 2019.
The more expensive southern regions have fared better than the national average, with a 72% uplift in the number of sales agreed in the East of England, and 69% uplift in the South East.
Rightmove goes on to say that buyers who were temporarily uncertain in run-up to the new lockdown in England have jumped back into action, with the first six days of the second lockdown seeing demand up by 49% on this time last year, as the housing market has remained open.
Tim Bannister, Rightmove’s Director of Property Data comments: “Given the ongoing mini-boom, prices might have been expected to rise again this month, but instead we have a slight dip which could be a result of some new sellers pricing more realistically to have a better chance of agreeing a sale in time to benefit from the stamp duty savings on their onward purchase. We know from a recent Rightmove study that sellers are twice as likely to sell if they agree a sale based on the first price at which their property goes on the market, something that’s even more important now as we move towards the end of March and the end of the stamp duty holiday. If your initial asking price is too high then you’re less likely to get an offer even after you’ve cut your price back to a more realistic level. Our revised prediction of a 7% annual increase in prices in 2020 looks to be on track, since the annual rate has jumped to 6.3% with a month to go.”
Halifax House Price Index – November 2020
Earlier this month the Halifax UK House Price Index found that house prices in October were 0.3% higher than in September (7.5% higher than in the same month a year earlier).
Russell Galley, Managing Director, Halifax, said: “The average UK house price now tops a quarter of a million pounds (£250,457) for the first time in history, as annual house price inflation rose to 7.5% in October, its highest rate since mid-2016. Underlying the pace of recent price growth in the market is the 5.3% gain over the past four months, the strongest since 2006. However, month-on-month price growth slowed considerably, down to just 0.3% compared to 1.5% in September.
Overall we saw a broad continuation of recent trends with the market still predominantly being driven by home-mover demand for larger houses. Since March flat prices are up by 2.0% compared to a 6.0% increase for a typical detached property. In cash terms that equates to a £2,883 increase for flats compared to a £27,371 rise for detached houses.
This level of price inflation is underpinned by unusually high levels of demand, with latest industry figures showing home-buyer mortgage approvals at their highest level since 2007, as transaction levels continue to be supercharged by pent-up demand as a result of the spring/summer lockdown, as well as the Chancellor’s waiver on stamp duty for properties up to £500,000. While Government support measures have undoubtedly helped to delay the expected downturn in the housing market, they will not continue indefinitely and, as we move through autumn and into winter, the macroeconomic landscape in the UK remains highly uncertain. Though the renewed lockdown is set to be less restrictive than earlier this year, it bears out that the country’s struggle with COVID-19 is far from over. With a number of clear headwinds facing the housing market, we expect to see greater downward pressure on house prices as we move into 2021.”
You can read the full Halifax report here.