Growth in UK house prices and activity is set to slow over the coming months, according to one of the country’s biggest mortgage lenders, even as it announced record high house prices in October and annual growth of 7.5 per cent.
The average price of a home in October surpassed a quarter of a million pounds for the first time to reach £250,457, according to the Halifax House Price index, which has been running since 1983.
Henry Pryor, an independent buying agent, said the reimposition of lockdown this week had yet to produce any let-up in demand among his clients, who were eager to complete their purchase ahead of March 31, when a temporary stamp duty holiday is due to end. The exemption can be worth up to £15,000 for buyers.
“It’s clear that the enthusiasm we were all witnessing in the spring for stockpiling has now been taken up by people’s desire to find a new home. Houses are the new toilet roll.”
The gain of 7.5 per cent compared with October 2019 was the highest annual rate since mid-2016. Prices over the three months to October were 4 per cent higher than in the preceding quarter.
However, the month-on-month price rise fell from 1.5 per cent in September to 0.3 per cent in October, suggesting the surge in demand seen in the months after the first lockdown was slowing.
Russell Carter, Halifax managing director, said transaction levels had been “supercharged by pent-up demand” after lockdown was partially relaxed, as well as by the stamp duty holiday announced in July, but demand was likely to fall back in an uncertain economic climate.
“With a number of clear headwinds facing the housing market, we expect to see greater downward pressure on house prices as we move into 2021,” he said.
Mortgage brokers and property agents said any retreat in sentiment among buyers and sellers had yet to emerge. “All the signs are we’ll see the market continue to be at least firm and in my view prices will continue to rise over the next 2-3 months,” said Ray Boulger, senior technical manager at mortgage broker John Charcol. He added he expected prices to end the year between 7 and 8 per cent higher than in 2019, based on current activity.
A sharp rise in Covid-19 cases prompted the government to reimpose lockdown, albeit under looser conditions than in March. The home buying process, including viewings and removals, is permitted to go ahead under social distancing and hygiene rules.
Mr Pryor said there was less nervousness this time around. “People are bolder because they know what the rules are. They have worked out that their appetite for a new home is marginally greater than their concern over contracting coronavirus.”
However, increased demand in the housing market has coincided with reduced capacity among professional groups such as surveyors, conveyancing solicitors and mortgage lenders to process applications or transactions under the restrictions, creating bottlenecks.
Beth Rudolf, director of delivery for the Conveyancing Association, the industry body, said one pinch point was the local authority search information required by buyers, as many authorities were experiencing delays in providing information and some had closed their search departments to new queries during November.
Solicitors were also struggling to resolve mortgage-related queries with lenders before exchange, she said. “Conveyancers have been holding for two hours to speak to some lenders to find out if they will still lend the money and they are OK to go ahead and exchange contracts.”
Ms Rudolf urged sellers to help potential buyers by putting in requests for local authority searches when they market their home, not waiting for buyers to do so, and for buyers to instruct a property lawyer “at the first opportunity”.
https://news.google.com/__i/rss/rd/articles/CBMiP2h0dHBzOi8vd3d3LmZ0LmNvbS9jb250ZW50LzFjZjYwOTdjLWY4ZDUtNDE1Mi1iNDk0LWY0NTU4NWE0ZDQxNtIBAA?oc=5
2020-11-06 12:44:00Z
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