Housing market cools slightly as stamp duty holiday nears end - Palmers Solicitors

Housing market cools slightly as stamp duty holiday nears end

Housing market cools slightly as stamp duty holiday nears end

The housing price boom has subsided slightly with a drop of 0.5 per cent in residential transactions in June, according to the latest House Price Index from the Halifax.

Annual house price inflation stood at 8.8 per cent compared to 9.6 per cent in May, while the average UK property price now £260,358.

UK seasonally adjusted residential transactions in May 2021 were 114,940 – down by 3.8 per cent from April (down 8.7 per cent on a non-seasonally adjusted basis).

The latest quarterly transactions (March-May 2021) were approximately 7.1 per cent higher than the preceding three months (December 2020-February 2021).

Despite the slowdown, demand for new homes, while still high, appears to be slowing, according to the latest UK Residential Markey Survey from The Royal Institution of Chartered Surveyor (RICS).

That survey revealed that 14 per cent of correspondents reported an increase in new buyer enquiries throughout June, down from 43 per cent in April.

“What’s more, this easing in momentum,” wrote RICS in its report, “is visible across virtually all regions/countries of the UK covered by the survey. Nevertheless, the latest feedback continues to signal a clear excess of demand over supply.”

Russell Galley, managing director at the Halifax, said: “The average UK house price slipped by -0.5 per cent in June, the first monthly fall since January.”

“As a result annual house price inflation also eased back slightly from May’s 14-year high of +9.6 per cent to stand at +8.8 per cent in June.

“It is important to put such a moderate decrease in context, with average prices still more than £21,000 higher than this time last year, following a broadly unprecedented period of gains.”

Government support measures over the last year have helped to boost demand, particularly amongst buyers searching for larger family homes at the upper end of the market. The average price of a detached home has risen faster than any other property type over the past 12 months, up by more than 10 per cent or almost £47,000 in cash terms.

At a cost of over half a million pounds, they are now £200,000 more expensive than the typical semi-detached house.

Nicola Tubbs, a Department Director with Palmers Solicitor and Head of the Residential Conveyancing team, said: “The past few months have been non-stop, not only for our team but for the other solicitors, estate agents, surveyors and mortgage advisors that we work with.

“Although the £500,000 stamp duty holiday has now ended, there are still many homebuyers who will be keen to ensure than they take advantage of the tax free incentive still available on homes up to £250,000 and we expect that it will be a race to the finish to complete before the 30 September deadline.”

For help and advice with all residential property matters including conveyancing, please get in touch with our expert team today.