Following on from last week's figures Halifax have released the data collected from August, which has also shown that housing figures proceeded to rise at a rate of 1.6% in August 2020, giving overall an increase of 5.2% in the last year, which is nearly £4,000. However, it has been warned that this is merely a 'blip' and housing prices are likely to smooth out and this increase may be due to the high demand and reduction on stamp duty. Halifax have noted that now levels have retained to those before lockdown regarding mortgage approvals. This therefore, is much better than originally forecasted when there was an uncertainty on what would happen to the property market with the current recession.
This levelling out is expected as it is predicted to hold a rise of unemployment in the near future. Nationwide has noted that this jump has meant that houses on average are at an all-time high with the average price of a property in the UK being £244,123, which is an £8,000 increase on February 2020. There has been a large rise in buyer enquiries of around 75%, with an increase of new instructions of around 59%, meaning currently sellers are in a good position for higher negotiations.
This will unfortunately mean that first time buyers will find it even harder now to find a property, as not only have prices increased by 5.2% but they don't have the upper hand of no stamp duty compared to others. Even though building societies have changed from 15% back down to 10% deposit, lenders for example Barclays have dropped the amount they are willing to lend from 5.5 times the buyer's income to now 4.49 times. This therefore means that since lockdown, buyers need a bigger deposit (as it went down to 5%), prices have increased by around £8,000 and the amount that banks are now willing to lend are smaller.
There is uncertainty of how the market will proceed, however experts have suggested that it will start to level out rather than dramatically drop, so if you are looking at buying or selling a property in the near future, why not bring that process forward and enjoy the market while it is hot. If you would like to speak to us about buying or selling a property, get in contact with us on 01233 501601.