September house prices show ‘last of stamp duty sizzle’
UK house prices leapt in the year to September in the run up to the final stamp duty holiday deadline, government figures show.
HMRC’s latest house price index shows that house prices climbed 2.5 per cent in September and 11.8 per cent annually.
The average price of a property in the UK was £269,945, hitting a record high.
Director of Benham and Reeves, Marc von Grundherr, said: “These latest figures certainly show the last of the stamp duty sizzle as homebuyers made a final push to secure a saving ahead of the extended deadline.
“For almost every region of the UK to see annual growth hit double figures is quite remarkable and this uplift is being driven as much by first-time buyers as it is existing homeowners.”
The fresh price high did not come as a shock to Tomer Aboody, director of property lender MT Finance, who put the record down to “the lack of sales volumes, increasing competition for those homes for sale.”
“Buyers fighting over bigger homes, with prices of houses rising more than flats, combined with the cheapest-ever mortgage rates, has created an extremely competitive environment,” he added.
Property prices will continue to rise if buyers’ options remain restricted, Aboody explained.
“Potential vendors need to be incentivised to sell, and this could be achieved by reducing or removing the stamp duty payments that downsizers have to pay.”
Real estate experts forecast a slowing rate of growth over the coming months, thanks to a predictable festive lethargy, with homebuyers keen to move after the Christmas period.
The pressure was back on the Bank of England to hike interest rates as a matter of urgency, real estate experts said.
“Mortgage pricing continues to be a mixed bag, with pricing rising for those requiring 60 to 75 per cent loan-to-values, while higher LTV borrowing costs continue to fall,” Mark Harris, chief executive of mortgage broker SPF Private Clients, said.
Harris added: “The good news is that lenders continue to broaden policy with many now back at pre-Covid criteria, making it easier for a wider range of people to get a mortgage.”
Hot competition
Estate agents told CityA.M. they had experienced roaring demand for properties, from both homebuyers and renters.
Nigel Mitchell, South East regional partner at Knight Frank said that Mowlands Farm, a Hampshire property with a £1.5m guide price, had received 117 viewings within three weeks of going to market.
Managing director of Barrows and Forrester, James Forrester, added: “It’s an incredibly competitive market at the moment and we’re seeing daily cases whereby homes are swamped with viewings and some buyers aren’t even making it through the door before offers are being submitted.”
The rental market is “moving at a rate of knots” as the return to the office gains momentum, according to Benham and Reeves’ Marc von Grundherr.
One property in Nine Elms received four viewings and three offers by 4pm after going living at 11am, Benham and Reeves said.
Another rental property in Colindale hosted an open house between 10am and midday. “21 people registered and 21 people turned up to view which has become the norm in current market conditions, but the usual rule of thumb is that half of those that register won’t actually turn up,” von Grundherr explained.