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.
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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”.
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