Mortgage enquiries surge as prices dip slightly in latest index

Mortgage enquiries in June surged to double the rate of the previous month according to the latest halifax house price index.

Although average house prices dipped by 0.1 per cent last month, following a 0.2 per cent drop in May, they remain 2.5 per cent higher than a year ago and less than one per cent below the immediate pre-lockdown level. 

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “On the one hand, prices have fallen for the fourth consecutive month but new mortgage enquiries are surging as buyers and sellers emerge from lockdown. The direction of travel in coming months will depend on the degree of support offered by the government and how quickly the economy can recover when furlough in particular is withdrawn. 

“Another factor of course now is stamp duty and any other measure introduced by the Chancellor to increase activity. Certainly, we are starting to see supply increasing and greater realism in sales agreed so do not expect prices to rise sharply in the near term.”

The director of another London agency - Marc von Grundherr of Benham and Reeves - says the potential announcement of a stamp duty relaxation by the Chancellor today should lift the market.

“Of course, some are already forecasting that many buyers will hold off now to benefit later, causing a slump in the market as a result. The flip side to this is that with such demand already returning to the market, postponing a purchase until October could see the price of your chosen property increase in value, exceeding the saving you might have made” he claims.

Russell Galley, the Halifax managing director, says of his latest index: “Activity levels bounced back strongly in June, which is typically the busiest month for mortgage activity in the UK. New mortgage enquiries were up by 100 per cent compared to May, and with prospective buyers also revisiting purchases previously put on hold, transaction volumes rose sharply compared to previous months. However, whilst encouraging, it remains too early to say if this level of activity will be sustained.”