• Annual house price inflation at 7.6% compared to 8.7% in June
  • Average UK property price now £261,221, up 0.4% in July
  • Wales records strongest house price growth since 2005
  • Average price: £261,221
  • Monthly change: +0.4%
  • Quarterly change: +2.4%
  • Annual change: +7.6%

Housing activity

HMRC monthly property transactions data for UK home sales increased in June 2021 to the highest ever level.

UK seasonally adjusted residential transactions in June 2021 were 198,240 – up by 74.1% from May (up 108.6% on a non-seasonally adjusted basis).

National Landlord Investment Show – MPU

The latest quarterly transactions (April-June 2021) were approximately 3.8% lower than the preceding three months (January 2021-March 2021).

Year on year, transactions were 219.1% higher than June 2020 (216.1% higher on a non-seasonally adjusted basis). (Source: HMRC, seasonally-adjusted figures)

The latest Bank of England figures show the number of mortgages approved to finance house purchases fell in June 2021 by 6% to 81,338.

Year-on-year, the June figure was 98% above June 2020. (Source: Bank of England, seasonally-adjusted figures)

Results from the latest (June 2021) RICS Residential Market Survey show another solid month for the sales market.

New buyer enquiries recorded a fourth successive positive net balance of +14%, although this has eased from April’s high figure of +43%. Newly agreed sales also remained positive with a net balance of +8% (previously +26%).

New instructions however fell to -34%, down from -24% previously – signaling a clear excess of demand over supply. (Source: Royal Institution of Chartered Surveyors’ (RICS) monthly report)

Russell Galley, Managing Director, Halifax, said:

“House prices rose by 0.4% in July to add £1,122 to the cost of the average property, pulling back some of the ground lost during June (-0.6%, -£1,543). Annual price growth fell to +7.6%, its lowest level since March.

This easing was somewhat expected given the strength of price inflation seen last summer, as the market began its recovery from the first lockdown, and with activity supported by the start of the stamp duty holiday.

In cash terms, typical prices now stand at just over £261,000, a little below May’s peak but still more than £18,500 higher than a year ago.”

“Recent months have been characterised by historically high volumes of buyer activity, with June the busiest month for mortgage completions since 2008.

This has been fueled both by the ‘race for space’ and the time-limited stamp duty break.

With the latter now entering its final stages (the zero percent rate only applies to the first £250,000 of the purchase price, before reverting back to standard rates from October), buyer activity should continue to ease over the coming months, and a steadier period for the market may lie ahead.”

“Latest industry figures show instructions for sale are falling and estate agents are experiencing a drop in their available stock. This general lack of supply should help to support prices in the near-term, as will the exceptionally low cost of borrowing and continued strong customer demand.”

“Although there remains some uncertainty over the impact on employment from the unwinding of government support schemes, on balance the risks to the macro-environment are receding, with consumer confidence improving, the labour market recovering, and the economy expanding as restrictions are lifted.

Overall, assuming a continuation of recent economic trends, we expect the housing market to remain solid over the next few months, with annual price growth continuing to slow but remaining well into positive territory by the end of the year.”

Regions and nations house prices

“While many regions saw annual house price growth slow somewhat in July, reflecting the broader national picture, that certainly wasn’t the case everywhere.

Once again, Wales and the North of England (specifically the North West and Yorkshire & Humberside) continue to lead the way, posting the strongest annual rates of house price inflation, whilst the South West also recorded a double-digit year-on-year rise.

Notably, the 13.8% annual increase in house prices in Wales was the strongest growth recorded since March 2005, whilst for Yorkshire the 11% gain was also the highest for over 16 years.

London continues to lag all regions in terms of annual inflation (+2.5%), whilst gains in the South East and Eastern England remain amongst the lowest in the UK.”

Director of Benham and Reeves, Marc von Grundherr, commented:

“Just when you thought the wild ride of property price growth seen over the last year might be coming to an end, the market has bounced back yet again to register further positive movement.”

“As we approach the third and final stamp duty holiday deadline it’s only natural that the rate of house price growth will ease as market activity reduces but despite this, we certainly look on course to finish the year on a very positive note.”

Managing Director of Barrows and Forrester, James Forrester, commented:

“The house price boom continues and even the unpredictable British summertime can do little to dampen the enthusiasm of UK homebuyers and sellers as properties continue to sell incredibly quickly and for a very good price across the vast majority of the nation.”

Founder and CEO of GetAgent.co.uk, Colby Short, commented:

“A shortage of stock, high demand and the lower cost of borrowing will keep the market buoyant far beyond September and the end of the stamp duty holiday.”

“However, should interest rates start to creep up over the coming months, many homebuyers could find themselves in a tough spot having paid over the odds for a property in current market conditions.”

CEO of Keller Williams UK, Ben Taylor, commented:

“Homebuyer confidence remains high at present despite many having to battle it out with multiple other buyers in order to secure a purchase.”

“This continued imbalance between supply and demand will ensure house price growth remains buoyant over the summer months, although we can expect a slow in pace as we approach the final quarter due to a combination of the stamp duty holiday ending and wider seasonal influences.”

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