House prices last month were 3.8 per cent higher than the same time last year – despite the stagnation to the property market caused by coronavirus.
Halifax’s House Price Index recorded the value of the average home at £241,604. It was the highest price on record for the Index, which began life in January 1983.
Other figures show a total of 63,250 homes were purchased in June. That figure is 31.7 per cent higher than when lockdown was lifted in May. It is also 1.7 per cent higher than in June when the average house price was listed as £237,834.
Property website Zoom recorded a loss of 124,000 house sales during lockdown. That’s equivalent to around £27bn.
Stamp Duty holiday buoying demand
Pent-up demand is responsible for both months’ high figures. However, it was the Stamp Duty Holiday that really pushed July’s sales. It came into force on July 8 and means thousands of pounds in savings for buyers of homes valued at up to £500,000 in England and Northern Ireland.
Buyers in both Scotland and Wales don’t pay any similar land and stamp duty tax up to £250,000. The scheme in all countries is due to end in March next year. So popular is the scheme that some in the property industry and urging the government to extend the barrier to property worth more than £500,000.
Halifax Managing Director Russell Galley also pointed to the ongoing lack of supply in housing as another contributing factor of higher property prices.
Property analysts say they are pleased to see the market recover after the slump. But they warn that the end of the furlough scheme in the Autumn could lead to a huge number of job losses and an economic crisis. This would, in turn, markedly affect the housing market.
Meanwhile current householders struggling to pay their mortgage will be entitled to continue to defer payments for up to six months from the end of October.
The eviction ban for tenants who can’t pay rent has already been extended and is due to end later this month on Aug 23.