Market Update – Rightmove and Zoopla House Price Index
Average house prices rose by 1.1% in the three months to May according to the Zoopla House Price index taking the annual rate of growth to 4.7% matching that in February – which was the highest level of growth since the beginning of 2017.
Prices are being supported by elevated levels of demand – despite a recent moderation approaching the end of the initial stamp duty holiday on June 230th
Average house prices in the UK have risen by more than £10,000 over the last year, taking the average price to £229,300. The spread of house price growth across the country continues to widen however, with annual price rises reaching a 10 year high in Yorkshire and Humber and the North East. Leeds has seen an increase of 5.9% year on year, this is the sixth highest performing City behind Liverpool, Manchester, Sheffield, Belfast and Nottingham.
As a result of the price growth over the last year, this means that 1.8milliom properties in England have moved into the higher stamp duty bracket and 940,000 additional homes will be subject to a level of stamp duty at 5% should they be purchased by a homeowner while, an extra 130,000 properties will attract some stamp duty at 10%.
The number of homes in the lower stamp duty bands in England is falling while the price growth means it is rising for the top bands.
The average additional stamp duty payable on homes that have moved up to the 10% stamp duty band will be around £6,100 after the end of the tapered stamp duty holiday in September, while the additional cost for the average homes that has moved into the 5% band will be around £725.
There is more activity amongst first-time buyers who have a wider range of mortgages to choose from, and who will still benefit from stamp duty savings up to £300,000 beyond June or September.
Fastest moving market in 5 years
Time to sell, which measures how quickly homes are sold subject to contract after being listed fell to 22 days in the recent recorded figures in May, this is down from 42 days in 2019. The seasonal nature of the market means it moves more quickly during April/May in most years, but this still marks the fastest moving market in the last 5 years.
This signals that the market continued to move apace, even when the prospect of the larger stamp duty savings for homemovers was off the table, underlining the ‘reassessment of home’ which is fuelling buyer activity , has further to run.
Market outlook
The stamp duty holiday boosted demand in the housing market, yet buyer demand remains elevated despite the initial holiday ending.
Demand may ease further as the re-opening of the economy allows people to do more and travel more widely, but at the same time, the confirmation of working practices for office-based workers will lead to more homebuyers being able to push ahead with a move.
The total stock of homes for sale continues to run below historical norms and this may underpin pricing. At the same time, it may also constrain potential activity, especially for buyers looking for family houses, even so we forecast that this year will be one of the busiest for the housing market with 1.5 million residential transactions.
David Phillip commented “last year’s unexpected mini-boom is rolling into 2021, with new price and market activity again defying many predictions. Leeds is showing some of the highest year on year trends for pricing increases which is positive. Our database is fresh and relevant and we have people actively looking to move to north Leeds particularly in Bramhope.”
If you are thinking of selling your home and would like a free market appraisal please call David Phillip Estate Agents on 01134 676 400
W: davidPhillip.co.uk A: 86, Leeds Road, Bramhope, Leeds
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