Halifax: House prices up £15k since June outweighing stamp duty saving

The average house price has risen by more than £15,000 since June, ‘far outweighing’ stamp duty holiday savings on most properties, Britain’s biggest mortgage lender Halifax said today.  

Its latest monthly house price index – which is based on mortgage approvals rather than actual sales prices – shows the price of an average UK home jumped 1.2 per cent in November to £253,243.

The potential stamp duty holiday saving on the average home is £2,650, while the maximum saving on a property costing £500,000 or more is £15,000. 

Compared to November last year, prices have risen 7.6 per cent annually, the fastest rate of property inflation in over four years – since June 2016. And the Halifax data suggests valuation have soared by a hefty 6.5 per cent since June.

The rise in prices in partly down to wealthy buyers targeting larger houses, experts say

The rise in prices in partly down to wealthy buyers targeting larger houses, experts say

The rise in prices in partly down to wealthy buyers targeting larger houses, experts say

The average house price on the index gained £3,000 in the last month alone, although monthly figures are volatile.

Halifax’s managing director Russell Galley noted that the stamp duty saving of £2,500 on a home costing £250,000 are now ‘far outweighed’ by the average increase in house prices since July.     

On 8 July, Chancellor Rishi Sunak slashed stamp duty on home purchases up to £500,000, with potential buyers looking to save a maximum £15,000 thanks to the cut. 

Nicky Stevenson of estate agent group Fine & Country said Halifax’s reading  should be taken with a pinch of salt, as the index is based on mortgage approvals, not actual sale prices.

‘Timetable pressure to complete before the stamp duty holiday closes at the end of March is mounting and many of the offers that underpin these numbers will not in fact take place,’ she said.

‘There’s still plenty of time before exchange for chains to suffer a misstep, pushing sales into April. This will force many of those who raised offers in haste to seal deals to scrutinise those valuations again,’ she added.

Booming market: Average house prices have risen by more than £15,000 since June and £3,000 in the last month alone, according to the latest index by mortgage lender Halifax

Booming market: Average house prices have risen by more than £15,000 since June and £3,000 in the last month alone, according to the latest index by mortgage lender Halifax

Booming market: Average house prices have risen by more than £15,000 since June and £3,000 in the last month alone, according to the latest index by mortgage lender Halifax

The price of an average UK home jumped 1.2 per cent in November to £253,243

The price of an average UK home jumped 1.2 per cent in November to £253,243

The price of an average UK home jumped 1.2 per cent in November to £253,243

‘That said, there’s no doubt the market has been running a little riot lately and, on paper at least, the average hike in prices since the stamp duty holiday was introduced now eclipses the saving available.’ 

Many home buyers have been rushing to buy to beat the stamp duty holiday deadline on 1 April 2021, resulting in mortgage approvals hitting a 13-year high last month and house sales jumping by almost 10 per cent in October.  

October saw around 105,630 home sales take place, an extra 8,820 compared to September, according to the provisional figures by HMRC. 

But Halifax said that, as the stamp duty deadline approaches, properties sold to home-movers saw a much bigger increase in price than first-time buyers’ homes – the former rose 7.9 per cent while the latter saw in increase of 5.8 per cent.   

Estate agents and experts agree that the mini-boom in the property market has been partly driven by wealthy buyers searching for larger houses with outside space where they can work from home.  

Stevenson added: ‘Such strong reported growth will be partly due to a key shift in buyer behaviour that can be firmly laid at the pandemic’s door this year. 

‘Since the first lockdown ended, the market has lurched towards larger, more expensive properties and that is puffing up the average sale price, skewing the overall growth rates as a result.’

Galley said the housing market has proved more resilient than expected at the start of the pandemic, but warned that a slowdown was likely the next year as unemployment rises. 

‘While industry data shows agreed sales and new instructions to sell fell to their lowest level in the past five months, both remain at historically high levels and well above seasonal norms,’ he said.  

‘However, the economic environment continues to look challenging. With unemployment predicted to peak around the middle of next year, and the UK’s economy not expected to fully recover the ground lost over 2020 for a number of years, a slowdown in housing market activity is likely over the next 12 months.’  

The October RICS Residential Market Survey show another strong month for housing market activity, with agreed sales net balance was at +41%, a slight slowdown from +54% in September

The October RICS Residential Market Survey show another strong month for housing market activity, with agreed sales net balance was at +41%, a slight slowdown from +54% in September

The October RICS Residential Market Survey show another strong month for housing market activity, with agreed sales net balance was at +41%, a slight slowdown from +54% in September

Halifax's table shows how house prices have changed on its index

Halifax's table shows how house prices have changed on its index

Halifax’s table shows how house prices have changed on its index

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