House prices set for ‘summer bounce’ in June thanks to stamp duty holiday extension
HOUSE PRICES will surge even further in June, according to new data. The "summer bounce" will take place as a result of the stamp duty holiday.
By MILLIE BULL
Laura Hamilton discusses rise in house prices
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House prices are on track for a summer bounce, according to reallymoving, the UK’s leading provider of free instant quotes for home-moving services. The sudden surge in house prices is as a result of deals agreed between buyers and sellers in March after Chancellor Rishi Sunak confirmed he would be extending the stamp duty holiday until the end of June. The reallymoving House Price Forecast March 2021 suggests that house prices were heading downwards before the property tax extension was revealed.
The data also suggests that completed sales will fall in May by 1.2 percent but will then grow by 4.4 percent in June.
According to reallymoving, conveyancing quote volumes began to accelerate around March 3 which was the day of the Budget.
By mid-March, these levels were 51 percent above normal levels.
House prices set for ‘summer bounce’ in June thanks to stamp duty holiday extension (Image: GETTY)
House prices: The data also suggests that completed sales will fall in May by 1.2 percent (Image: GETTY)
At the end of March, they were over 100 percent higher than normal levels.
Buyer demand has surged across the UK property market which has led to a dip in supply levels.
With supply levels failing to keep up with buyer demand, there has been a 2.8 percent increase in the average value of deals being agreed.
Land Registry Price Paid data will reflect this in June, according to reallymoving.
The comparison site has used the data to create a three-month house price forecast.
The stamp duty holiday, which was put in place in July, was originally due to end at the end of March.
However, this was extended to the end of June.
Houses bought for up to the value of £500,000 are exempt from paying stamp duty until the end of June.
From the end of June, the threshold will be set at £250,000 until the autumn when it will go back down to £125,000.
The data from reallymoving suggests that prices will remain stable in April before dipping in May and rising in June.
Rob Houghton, CEO of reallymoving, comments said estate agents and property portals in the UK have reported a surge in demand following the stamp duty holiday extension.
He explained further: “Agents and portals across the UK have been reporting a surge in buyer demand following the stamp duty extension announcement, and now through our analysis of conveyancing quote data, we’re seeing the first clear evidence that this activity has led buyers and sellers to agree deals at higher prices in March, which will become evident in Land Registry data in the early summer.
“Many homebuyers have cash in the bank, money is cheap to borrow and, with lockdown restrictions now beginning to ease, people are feeling optimistic about a future where they may be less tied to an office-based 9 to 5, giving them greater freedom to live where they choose.
“First Time Buyers are currently enjoying a 56 percent market share and with the first Government guaranteed 95 percent loans expected to become available any day now, we’re optimistic that they will continue to maintain these activity levels despite greater competition for homes and rising prices.”
New 95 percent mortgages will be available from today and are open to mortgage applications on properties worth up to £600,000.