House prices bounce back as UK property market makes ‘rapid recovery’

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Experts have been watching the property market closely since the lockdown eased and restrictions on house viewings were lifted. But while there was initial concern about a potential crash, the latest report suggests that the market is thriving this summer. According to Nationwide, house price growth has recovered in the past month and are now up 1.5 percent year on year. 

The news comes after there was a reported drop in house prices the month before. 

Robert Gardner, Nationwide’s Chief Economist, commented: “UK house prices rose by 1.7 percent in July, after taking account of seasonal effects, offsetting the 1.6 percent fall in June. 

“As a result, annual house price growth recovered to 1.5 percent, from -0.1 percent last month. 

“On a seasonally adjusted basis, house prices in July were 1.6 percent lower than in April.

“The bounce back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions.”

The speedy recovery is thought to be down to the pent-up demand as movers and first-time buyers had to wait during the initial lockdown, as well as the change in stamp duty rules. 

Earlier this month, the chancellor announced a temporary holiday on stamp duty on the first £500,000 of all property sales in England and Northern Ireland until March 31 2021.

It means that buyers could save thousands on purchasing their first or next home. 

Many buyers are already taking advantage of the saving, with property experts revealing a surge in demand in recent months. 

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Gardner added that the lockdown had also pushed people to make a move as they reconsidered their home life. 

“Behavioural shifts may be boosting activity, as people reassess their housing needs and preferences as a result of life in lockdown. Our own research, conducted in May, indicated that around 15 percent of people surveyed were considering moving as a result of life in lockdown.”

The average house price was £220,936 in July, compared to £216,403 in June, according to the new report. 

Nationwide said it expected the trend to continue in the short term, though it remains to be seen whether there will be a dip later on. 

Other experts are more hopeful following the news. Managing Director of Barrows and Forrester, James Forrester, commented: 

“The rate at which the property market has rebounded over these last few months has been nothing short of miraculous, and it certainly feels as though this is just the tip of the iceberg. 

“While the current pandemic continues to dampen many aspects of life, homeownership isn’t one of them, and we should continue to see some very positive price trends play out over the year.

“Those that were so quick to talk the market down seem to have now entered into an unseasonal hibernation. “While they will no doubt emerge from their boltholes of negativity to forecast yet further armageddon in the event of a second-wave, it’s quite clear that the market isn’t prepared to lay down and die as they might have hoped.”

Director of Benham and Reeves, Marc von Grundherr, commented that the best could be yet to come for those hoping to see house prices rise. 

“The property market party is in full swing at the moment, and we’re yet to see the benefit of the recently announced stamp duty holiday filter through. 

“Once that does, expect further increases in house price growth due to a notable and sustained increase in buyer demand.”

Group CEO of Enness Global Mortgages, Islay Robinson, agreed with this optimistic outlook.

“Buyer demand has been turbocharged via a stamp duty holiday, mortgage rates remain very favourable, and buyers and sellers are returning to the market in their droves.

“We’re also seeing a strong return to form at the top-end of the market and from foreign buyers.

“All things considered, the outlook is a positive one, and we’ve seen the dark clouds of market decline make away for the perfect storm of property price growth over the coming months.”  

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