The UK’s love affair with property is showing no signs of waning. The latest Nationwide House Price Index shows house prices rose by 1.5% in the year to July wiping out the June’s 0.1 per cent annual fall.
The Nationwide House Price Index is one of the best indicators for the health of the UK property market. Britain’s largest building society has produced the longest unbroken run of house price data which stretches all the way back to the early 1950s. Their latest report shows that annual house price growth has recovered to 1.5% in July, and prices are up by 1.7% once seasonal factors are taken into account.
Robert Gardner, Nationwide’s Chief Economist, offered an extensive commentary in the societies latest press release, some of which can be seen below:
“The bounce back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions. The rebound in activity reflects a number of factors. Pent up demand is coming through, where decisions are taken to move before lockdown are progressing”.
“These trends look set to continue in the near term, further boosted by the recently announced stamp duty holiday, which will serve to bring some activity forward.”
As is common these days, many commentators are wary of getting too caught up in the euphoria, so Robert Gardner added a note of caution in his comments:
“However, there is a risk this proves to be something of a false dawn. Most forecasters expect labour market conditions to weaken significantly in the quarters ahead as a result of the after-effects of the pandemic and as government support schemes wind down. If this comes to pass, it would likely dampen housing activity once again in the quarters ahead.”
Although the Nationwide House Price Index is a positive confirmation of the property market bounce back, it is always wise to get the opinions of leading people working within the industry.
James Forrester, Managing Director of Barrows and Forrester, said: “The rate at which the property market has rebounded over these last few months has been nothing short of miraculous, and it certainly feels as though this is just the tip of the iceberg.
While the current pandemic continues to dampen many aspects of life, homeownership isn’t one of them, and we should continue to see some very positive price trends play out over the year.
Those that were so quick to talk the market down seem to have now entered into an unseasonal hibernation. While they will no doubt emerge from their boltholes of negativity to forecast yet further armageddon in the even of a second-wave, it’s quite clear that the market isn’t prepared to lay down and die as they might have hoped.”
Director of Benham and Reeves, Marc von Grundherr, added: “The property market party is in full swing at the moment, and we’re yet to see the benefit of the recently announced stamp duty holiday filter through. Once that does, expect further increases in house price growth due to a notable and sustained increase in buyer demand.
London, in particular, has now turned a corner and will see the vast majority of buyers benefit from a stamp duty reprieve. This will help accelerate the capital return to form and see the region regain its seat at the helm of the UK property market, helping to drive house price growth in the right direction.
As a result, we should finish the year in a much, much better position than anyone could have imagined just a few short months ago.”
In addition to opinions from leading estate agents and to gain a better overall picture on the health of the market, it’s wise to get the views of leading people working in the mortgage sector.
Islay Robinson, Group CEO of Enness Global Mortgages said: “Buyer demand has been turbocharged via a stamp duty holiday, mortgage rates remain very favourable, and buyers and sellers are returning to the market in their droves.
We’re also seeing a strong return to form at the top-end of the market and from foreign buyers.
All things considered, the outlook is a positive one, and we’ve seen the dark clouds of market decline make away for the perfect storm of property price growth over the coming months.”
Not everyone is so positive in the direction of the property market. The Centre for Economic and Business Research (CEBR) recently forecasted a decline in prices this year of 8.7% by the end of 2020, a revision of their initial doom and gloom estimate of 13%.
No doubt. we’ll get another revision in the near future.
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