According to figures released from property website Rightmove, a mini UK housing market boom has been gathering pace since finance minister Rishi Sunak announced the stamp duty tax cut earlier this month.
Rightmove revealed that in the five days after Sunak’s announcement on July 8, the number of sales agreed in England rose by an annual 35% when compared with the same period last year.
This contributed to a large increase in the recovery that was already taking place, which saw agreed sales grow by 15% in June.
In a bid to help boost the UK economy, Sunak temporarily raised the tax threshold, meaning UK buyers now pay no stamp duty on properties worth £500,000 or less. These new rates are set to be in place until 31 March 2021, with the change said to save each home-buyer an average of £4,500.
According to Rightmove, prices sought by home sellers hit a record high between June 7 and June 11; rising by an annual 3.7% to hit an average of 312,625. This was an increase of 2.4% when compared to prices before the COVID-19 lockdown commenced in March.
“These figures are the earliest indicator of house price trends,” Rightmove Director Miles Shipside said. “They show on average prices gently rising not falling, and this will be reflected in the coming months in other house price reports.”
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Mortgage lenders Nationwide and Halifax have reported major decreases in mortgage approvals and house prices, according to Bank of England data.
As a whole, Rightmove figures indicate a strong recovery in interest from potential buyers as a result of the stamp duty cut, with recent buyer enquiries across Britain increasing by 75% when compared to last years statistics.
Jon Cooper, Head of Distribution at specialist bank, Aldermore commented:
“It is encouraging to see the Government be proactive in backing homebuyers in a time when there is an urgent need to stimulate the market. The initial costs of getting on the ladder can be a real barrier to many, so anything that helps reduce that entry fee is welcome for the housing market.
“The wider economic recovery through job retention after the furlough scheme ends and the continual protection of businesses will be the real determining factor for how the housing market performs throughout the rest of this year. Homeowners and first time buyers need job security if they are to feel confident in realising their homeowner plans.”
John Goodall, CEO of Landbay, added:
“There is clearly pent up demand for housing following three months of lockdown and the Chancellor’s stamp duty cut is effectively giving people the extra cash to inspire them to make the move. The good news is that this also applies to landlords buying properties with a buy-to-let mortgage.”
“The demand for private rental property is higher than ever. There are a lot of people who, due to being furloughed or made redundant, may not now be able to get on the housing ladder and for whom good quality rental will be essential. As the cut in stamp duty may well encourage landlords to invest in further housing as well as helping other people to move house it should help both house purchasers and renters.”
Last week, Bank of England Governor Andrew Bailey said there were promising signs of activity returning “quite strongly” in the housing market.