Stamp Duty Holiday impact fades as market returns to near-normal

House prices in July rose after falling in June, according to the Halifax.

They were 0.4 per cent higher than in June, although in annual terms, prices were 7.6 per cent higher than in July 2020, slowing from June’s 8.7 per cent annual increase.

Agents are confident this signifies an orderly slowdown ahead of the eventual end of the stamp duty holiday in late September.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “After a record-breaking June, the housing market is becoming accustomed to more ‘normal’ levels of activity but still above what we would reasonably expect at this time of year. 

“There is no serious price correction or steep fall in transactions as these figures bear out. Certainly, we are seeing that nearly all sales agreed before the stamp duty concession began to taper off are proceeding and without price renegotiation. 

“Available stock remains at low levels and this is continuing to support values, along with cheap mortgage rates.”

And Lucy Pendleton, property expert at independent agency James Pendleton, adds: “The reality is that no one we’re dealing with is even mentioning the stamp duty holiday. It’s a distant memory, and many of those who realised they weren’t going to make the June deadline and stepped away, have returned, determined to make their move happen. 

“There isn’t the same level of activity as there was four months ago but that was never going to be the case.”

Meanwhile the Keller Williams UK chief executive, Ben Taylor, comments: “Homebuyer confidence remains high at present despite many having to battle it out with multiple other buyers in order to secure a purchase. This continued imbalance between supply and demand will ensure house price growth remains buoyant over the summer months, although we can expect a slow in pace as we approach the final quarter due to a combination of the stamp duty holiday ending and wider seasonal influences.”

Russell Galley, managing director of Halifax says: “Recent months have been characterised by historically high volumes of buyer activity, with June the busiest month for mortgage completions since 2008.”

He adds: “This has been fueled both by the ‘race for space’ and the time-limited stamp duty break. With the latter now entering its final stages, buyer activity should continue to ease over the coming months, and a steadier period for the market may lie ahead.

“Overall, assuming a continuation of recent economic trends, we expect the housing market to remain solid over the next few months, with annual price growth continuing to slow but remaining well into positive territory by the end of the year.”