Annual UK house price growth slowed in July as stamp duty holiday got less generous

·2-min read
Annual house price growth cooled in July 2021 (Jonathan Brady/PA)
Annual house price growth cooled in July 2021 (Jonathan Brady/PA)

Annual average UK house price growth slowed to 10.5% in the month when a less generous stamp duty holiday came in.

According to Nationwide Building Society, average prices in July stood at £244,229.

That was 10.5% higher than a year earlier, but a 0.5% decline from June 2021 when annual growth of 13.4% was recorded.

Robert Gardner, Nationwide’s chief economist, said: “The modest fallback in July was unsurprising given the significant gains recorded in recent months. Indeed, house prices increased by an average of 1.6% a month over the April to June period – more than six times the average monthly gain recorded in the five years before the pandemic.”

Numerous people have been reassessing housing needs during the virus crisis, such as whether they want more outdoors space. The sector was also boosted by a stamp duty holiday introduced last year.

June was the last month buyers could enjoy a suspension of stamp duty on property sales of up to £500,000. From July 1 to September 30 the threshold for the stamp duty holiday is £250,000.

Nationwide’s Gardner said the tapering of stamp duty relief is “likely to have taken some of the heat out of the market”.

He expects underlying demand to remain solid in the near term, helped by a rebound in consumer confidence, borrowing costs remaining low, and a lack of supply on the market.

However, Gardner cautioned that the outlook is harder to foresee for towards the end of 2021.

Guy Gittins, chief executive of estate agency chain Chestertons, said: “The inflated market activity we have seen due to the stamp duty holiday appears to have finally reached its peak after an unprecedented number of property sales during the first half of the year.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, pointed out there was a rush to get deals done before July. He said: “The reduction in stamp duty savings was a significant incentive for buyers to get deals done by the end of June if at all possible, with many pulling out all the stops to do so.”

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