As the summer and stamp duty holiday comes to an end, reports of changes in the housing market have been released causing many of us to worry.
For many of us, the idea of owning a property or getting stuck into a home renovation as an investment is a bit of a dream. However, some are concerned that in light of recent statistics—it could actually be a nightmare.
One report from the Guardian said, "the average UK house price fell by £10,000 in July compared with a month earlier, official figures show, as the housing market appeared to cool after the phasing out of the stamp duty holiday."
These types of reports have caused some homeowners to worry about the value of their properties. We spoke to Chris Salmon, a property expert who works as the Operations Director of conveyancing specialists Quittance Legal Services and property expert Bruna Pani from We Buy any House to comment on these changes.
How has the pandemic affected the housing market?
When asked how the pandemic may have affected the housing market, Chris explained that house prices actually soared over a 12 month period.
"The pandemic has pushed up property prices, as well as market activity. In June 2021 the number of home purchases that were registered was 200% higher than June 2020," explained Chris.
He went on to say that this increase was primarily because many buyers were eager to avoid stamp duty.
"This is largely due to the stamp duty holiday which saw many prospective buyers want to rush their purchase in order to avoid the tax. This is shown by the fact that the number of houses sold went down to pre-pandemic levels in July 2021 when the holiday started tapering down," said Chris.
Reports show that the average UK house price dropped by £10,000 in July 2021, will this trend continue?
Chris also explained that a large drop in the housing market is unlikely to take place in the following months. "The number of properties being bought and sold has remained steady from July to August and this tends to correlate accurately with house prices. Therefore further large drops in house prices are unlikely.
"I doubt this trend will continue. July was the month that the Stamp Duty Holiday started tapering off, and more importantly, it was when the Holiday "ended" in the public consciousness."
Bruna also suggested, "After months of inflates house prices, these results suggest that the property market could be cooling after an extended period of inflated house prices."
However, the property expert positively added, "As of now, the average house in the UK costs £256,000, and although this has been a 3.4% decline since June 2021, prices are around £19,000 higher than last year."
So although there may have been a dip, property prices are still much higher than they were 14 months ago and no further dips are predicted!
When does the stamp duty holiday end?
Chris explained that although the official end date for the stamp duty holiday is not until late in the Autumn, for many homes this relief stopped in the Summer.
"The Stamp Duty Holiday ends on 1st October. However, it stopped affecting most properties on 1st July," said Chris as he added that "the main effects of it ending on house prices were seen in July."
Bruna also reminded readers that property buyers can still make use of this tax-saving in certain areas. "In the UK, savings of up to £15,000 ended on June 30th, however, buyers in Northern Ireland and England can still save up to £2,500 if they purchase a property before the end of September," said Bruna.
What will happen to UK house prices in September?
Chris concluded by saying that in September house prices should remain consistent despite the Stamp Duty relief officially ending on October 1st.
"For the most part, they will remain largely the same as they are now. Although the Stamp Duty Holiday fully ends at the end of September, only a small amount of properties are affected by that, not enough to see a significant drop in house prices."
Bruna also concluded that despite a few rocky months, there are already signs of improvement in the market.
"Research shows that house prices have risen by 8% year-on-year, however, there was a significant fall of –3.7% in comparison with June. There has been shown to be a softening in house prices, and minimal growth in June followed by a minor fall in July.
"However," Bruna crucially added, "there was an unexpected bounce back in August, and house prices rose by 2.1%- which has been the second-highest growth in 15 years."
So, although prospective buyers might not be delighted about this news, homeowners can breathe a sigh of relief. It looks like any slight drops in housing prices were likely to do with the end of the stamp duty holiday and prices should plateau over the coming months.
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Laura is a news writer for woman&home who primarily covers entertainment and celebrity news. Laura dabbles in lifestyle, royal, beauty, and fashion news, and loves to cover anything and everything to do with television and film. She is also passionate about feminism and equality and loves writing about gender issues and feminist literature.
Laura loves drinking and eating and can often be found trying to get reservations at London's trendiest restaurants. When she's not wining and dining, Laura can also be found travelling, baking, and hiking with her dog.
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