Will UK house prices stay high?
UK house prices dipped by 0.5% in June, according to Halifax. But prices are expected to remain buoyant.
UK house prices dipped by 0.5% in June, according to Halifax. A looming stamp-duty cliff-edge at the end of the month has cooled demand. Stamp-duty relief is now being tapered until it ends on 30 September. Still, Halifax says prices are up by 8.8% on the year. Nationwide reported last month that its house-price index has surged by 13.4% in a year, the biggest annual leap since November 2004.
The housing market has soared on a cocktail of low interest rates, government furlough help and the stamp-duty holiday. Yet property is now heading into uncertain territory, says Geoff Meen for theconversation.com.
The end of the stamp-duty holiday comes as the furlough scheme is also winding down, which could have an effect on incomes: “as an approximation, a 1% reduction in real income has historically led to about a 2% reduction in house prices”. Prices, stretched by a mammoth rally, are also more vulnerable to economic shocks.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The market will shrug off the end of state support, says Isabelle Fraser in The Daily Telegraph. Demand might fall back, but supply is even tighter. “The ratio of sold to available properties is at its lowest level since July 2002.”
After the buying frenzy of the past year, property “resembles a supermarket in the early days of lockdown: the shelves are bare and only the dregs remain”. Expect prices to remain “buoyant”.
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
Alex Rankine is Moneyweek's markets editor
-
Higher rates are disappearing – should you fix your savings?
Fixed savings rates have dropped to their lowest levels in over a year. Should you fix your savings now ahead of a potential base rate cut in November?
By Katie Williams Published
-
Nine million people fall victim to financial scams, says Citizens Advice
The charity says that around one in five people across the UK have been caught out by a finance scam in the past year - here is how to protect your money
By Chris Newlands Published
-
Is property becoming uninsurable?
Climate change and other issues are leading property insurers to recalculate risk and raise premiums. But will that make policies unaffordable? And if so, what then?
By Simon Wilson Published
-
What will a broken-up Google look like?
The US courts have ruled that Google is a monopoly, leaving it facing the prospect of a break-up. WIll that be a good thing?
By Matthew Lynn Published
-
How will the UK gambling sector be hit by the Budget?
There are concerns for the UK gambling sector in the lead-up to the Autumn Budget. What could be on the cards?
By Dr Matthew Partridge Published
-
HSBC returns to cost-cutting plan
HSBC is set to revamp its commercial banking division – but will it come at a cost?
By Dr Matthew Partridge Published
-
Global housing markets bounce back
From Canada to the US, global housing markets have surpassed crises and made a comeback
By Alex Rankine Published
-
Pfizer shares rise as US investor takes $1 billion stake
Pfizer shares are on the up since US activist investor Starboard Value built up a stake in the drug maker. But strategic options appear limited
By Dr Matthew Partridge Published
-
LSL Property Services: a profit-machine in the property sector
LSL covers every area of the residential real estate market and should thrive after its shake-up
By Rupert Hargreaves Published
-
Harworth doubles profit as revenue soars – should you buy?
Harworth, a specialist property developer, is well-aligned with government policies, with revenue expected to rise by over 50% this year, and a further 30% the year after.
By Dr Matthew Partridge Published