The looming end of the stamp duty holiday this week is having no effect on the property market as house prices continue to rise.
Over the past three months, prices have risen by 1.2 per cent, taking the cost of the average home in Britain up to £235,000, according to Zoopla, the online property portal. Over the past year, prices across the UK are up by 6.1 per cent.
Wales continues to be the place where prices are rising fastest, up by 9.8 per cent since this time last year, while prices in Northern Ireland have climbed by 8.4 per cent in that time.
At a more local level, Liverpool is experiencing the strongest price growth, with average prices up 9.8 per cent over the past 12 months. That compares with London, where prices have risen by only 2.2 per cent in the year to September, below the present level of inflation.
The capital, for years the nation’s strongest property market, has tumbled to the bottom of the table during the pandemic, having been hit by the exodus of people from the city and to the suburbs.
That trend of movers looking for more space and bigger gardens, after the repeated lockdowns, has “further to run”, according to Gráinne Gilmore, Zoopla’s head of research. “In the face of the very strong buyer demand evident since May last year, average home values have risen by a greater margin in regions and towns where relative affordability is greater,” she said.
London has the greatest affordability constraints, with the average house price now above £500,000. Despite this, the market in the capital is starting to show signs of life, which Zoopla put down to the reopening of overseas travel and the return of workers to offices. Buyer demand in London is up by 14 per cent over the past month with houses receiving greater interest from would-be homeowners than flats.
There had been some expectations that the property market, on fire for much of the pandemic, would start to cool once the stamp duty holiday came to an end. Until June, buyers could save up to £15,000 on their purchase, although this has since been cut back to £2,500 for sales that complete before this Friday, October 1. However, Zoopla said that there had been “no sign of a cliff edge in demand” as the deadline approaches.
The time it takes for a property to sell remains at record low levels, taking 27 days on average. Before the pandemic, it typically would take upwards of 50 days for a seller to find a buyer.
On top of higher demand than usual, house prices are being further supported by a lack of supply, Zoopla added, with the number of homes up for sale below typical levels, meaning that more buyers are competing for fewer houses.
There is, however, evidence that landlords are looking to cash in on the house price boom by selling some of their properties. Typically, about 3 per cent of all houses on the market have been rented out by the owner, but Zoopla reckons that 8 per cent of those up for sale at present are rentals.
Zoopla’s expectation is that the British property market will remain “busy compared to historical norms”, which in turn will keep prices rising higher, albeit probably not as rapidly as they are now.