Throughout this year, we’ve seen house prices continue to rise, but with the end of the stamp duty holiday, what’s next for the housing market?
Below, our specialist advisers have reviewed the property forecast to offer their views on what you can expect over coming months.
What impact has the end of the stamp duty holiday had on the property market?
Nationwide Building Society has found that annual house price growth has accelerated to 13.4% in June, which happens to be the strongest growth since 2004. Not only this, but during the last month, the average house price has increased to £245,432, with prices up 0.7% in comparison to May 2021.
Over the last few months, there’s been a rush for those buying properties to complete their purchase before the end of the stamp duty holiday. Whilst there is currently a taper, with the threshold dropping to £250,000 until the end of September, the full exemption ended on 30th June 2021.
It was originally thought that the end of the stamp duty holiday would be a turning point for house prices, however experts now believe that house prices will continue to climb this year, but not at such a high rate. In fact, both Knight Frank and Savills believe the average property price will increase between 4% and 5% over the next 6 months.
The stamp duty holiday has certainly had the effect the government hoped when they announced it, as the property market is moving and continuing to grow. In fact, the holiday has led to a shortage in the number of available properties. The number of houses on the market is running at 24% below the average levels of last year, whilst new properties coming to the market has fallen by a third in June.
Ultimately, the fact remains that where you have short supply and high demand, you’re likely to find prices continue to rise.
Should you invest in property in 2021?
The last 18 months have been a rollercoaster for the property market, and as the market continues to grow, you may be wondering whether now is a good time to invest.
“Underlying demand is likely to soften around the turn of the year if unemployment rises as most analysts expect, as government support schemes wind down.
“But even this is far from assured. Even if the labour market does weaken, there is also scope for shifts in housing preferences as a result of the pandemic to continue to support activity for some time yet.”
Even though the SDLT holiday is being phased out, it doesn’t mean that demand to move has disappeared, especially as more businesses offer increased levels of remote working. Without the need for a lengthy commute, people can move further away from the location they felt tied down to for work.
However, there are numerous other factors to be considered in regard to the future of the property market. This includes the lifting of the renter eviction ban and the end of furlough, which may see increased stock in the market.
It is therefore important to consider that although the last few months have been a tough time for those in property investment, there may be some game-changing variables that could swing in favour of investors.
Finance 4 Business
At Finance 4 Business, we offer expert advice on the options available to you. Our experienced and knowledgeable advisers have a full understanding of the current property market, and can advise you on the best route to take to achieve your goals.