Property prices are continuing to soar, according to the latest Halifax House Price Index, released today.
Figures collected by the lender show the value of the average home in April is £20,000 more than the same period last year. It’s a rise of 1.4% – the fastest in five years – and takes the average selling price of a UK property to around £258,000.
The continuation of the Stamp Duty Holiday, buyers desperate for more space and the government’s new Mortgage Guarantee scheme are all contributing to the rocketing property market. So too is the fact many buyers have been able to save more during lockdown.
A spokesman at estate agent’s Fine & Country said: “The air is thin up here and, even though all buyers know in their hearts that things will calm down and growth will slow later this year, they are still frantically bidding up prices.”
Property selling within 24 hours
In fact, so competitive has the buying process become in Manchester that estate agents there say some properties are selling the same day they are listed. Other listings are receiving up to 20 offers within a few days. Some house sales are conducted via sealed bids. It’s not exceptional for properties in the suburbs to go £50,000 over the asking price either.
Such is the desperation that some estate agents are reporting abuse from frantic buyers angry at missing out on viewings due to COVID-19 restrictions.
The North West as a whole is experiencing the fastest transaction rate in the UK, with seven from 10 of the biggest increases in house prices in areas of Greater Manchester, Lancashire and Cheshire, according to a recent survey by Rightmove. Houses in Salford have risen 44% in value within the past five years, from £129,563 to £188,600 in February.
Other evidence the property market in the UK is currently flourishing is HMRC figures for March which showed 191,000 properties selling – an increase of 32.2% from the previous month.
Then there is the Bank of England’s borrowing figures for March, which showed the biggest net increase in borrowing since records began back in 1993. The figure was a net £11.8 bn. A total of 82,735 mortgages were approved that month – a drop of 5,000 from February. The highest month for approvals was November, when 103,000 mortgages were given the green light.
Frantic pace to continue to autumn
The Chancellor’s Stamp Duty Holiday where buyers pay no tax on the first £500,000 of a property, will end in June. Then the tax-free amount will be cut to £250,000. In September the allowance reverts back to the usual £125,000.
That coincides with the end of the furlough scheme and what economists predict, will be many job losses. It’s only at this point that a slowdown in the property market is predicted. House prices though are expected to remain high, thanks to low interest rates and dwindling stock numbers (and which are already far lower than demand).
Despite this, a successful vaccination roll-out and loosening of lockdown restrictions much earlier than previously anticipated is also providing a boost to the economy.