As many people dashed to find new homes with more space and gardens, house prices rocketed during the coronavirus lockdown. The Stamp Duty holiday introduced by Chancellor Rishi Sunak last year is thought to have contributed to many people’s decision to move home during the pandemic, thanks to the threshold for paying the tax raising temporarily to £500,000.
Although the Stamp Duty holiday is still in place, the most recent figures suggest there has been a slight cooling in the housing market.
House prices fell by 0.5 percent in July, and the month-on-month drop came after a rise of 0.7 percent in June.
The Nationwide house price index showed annual house price growth cooled to 10.5 percent in July, down from the 17-year high of 13.4 percent recorded the previous month.
Nationwide Building Society said the average house price in July stood at £244,229, down from £245,432 in June.
Are house prices going to fall this year?
It is impossible to predict exactly how house prices will change later this year.- and experts are divided over what the future of the property market holds.
Some property experts still think the housing market will see demand after the Stamp Duty holiday ends before October.
Helen Hutchison, a residential property partner at Irwin Mitchell, told Express.co.uk: “It remains to be seen what effect the end of the Stamp Duty holiday will have on house prices.
“Although there was a massive surge in buying and selling prior to the initial deadline of June 30, we’re still seeing plenty of activity and new deals being made every day.
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“House prices did drop in June for the first time since January – however year-on-year prices are still up.
“There are still some moving pieces which could also influence price. For instance, the Government is yet to end the furlough scheme, and a large number of businesses and employees are looking to shift to a more flexible working approach, with many choosing to remain working from home.
“This has a knock-on effect of prospective homeowners wanting a change of scenery, having being stuck in their current properties during the lockdown, or potentially looking to move out of cities as the daily commute is no longer a necessity.
“At present demand is still high, but with limited supply so properties that fit the above bill are seeing multiple offers at asking price or over.
“We suspect whilst there may be an initial deceleration of interest in the housing market after the Stamp Duty holiday ends, hopefully, this should even out over the next year.”
The demand for houses could still be strong after the Stamp Duty holiday ends, meaning there isn’t a major drop in house prices after the holiday finally closes.
Dale Anderson, MD of Fabrik Invest, told Express.co.uk: “Despite the end of the Stamp Duty holiday, people will still be rethinking the way that they live and the geographical relationship between their home and their place of work.
“This means that there’s still plenty of demand from buyers, while supply remains constricted.
“As such, the end of the Stamp Duty holiday is unlikely to lead to a major drop in prices.
“Instead, it’s likely that these wider market factors will continue to push prices upward, as buyers continue to seek more space and homes that are more conducive to their wellbeing.”
Are you looking at buying a house this year? Either as a First Time Buyer or simply moving home? Let us know in the comments and share your thoughts.