The industry has welcomed the data from the Office for National Statistics (ONS), which shows that the average price of a residential property in the UK increased by 1.7% in September to reach an average of £244,513, up 4.7% year-on-year.
Average house prices increased over the year in England to £262,000, which is up 4.9% on last year thanks in part to the current stamp duty holiday.
Wales saw average prices increase 3.8% to £171,000, in Scotland they now stand at £162,000, up 4.3% compared with last year, while in Northern Ireland the average price of a home is £143,000, up 2.4% year-on-year.
Nick Leeming, chairman of Jackson-Stops, commented: “House price growth this month is almost double what it was in September last year, as we start to see the true impact of the stamp duty holiday take hold.
“Despite the incentive being introduced in July, housing transactions take weeks to progress from offer to completion, therefore this is the first month we can begin to assess the benefits of Sunak’s stimulus. The annual uplift in house prices of nearly 5% suggests that sellers may well be adding the savings buyers are making into the price of their homes, so that they also benefit from the incentive.”
While all regions of the UK reported price growth in September, the South West and the North West led the charge – each experiencing price growth of more than 6% growth.
Director of Benham and Reeves, Marc von Grundherr, commented: “The property market continues to fire on all cylinders with positive movement across the board in all but one region on a monthly basis and a clean sweep where annual price appreciation is concerned. While the current stamp duty holiday has caused huge backlogs of sales waiting to complete, there’s no doubt that it has contributed a considerable level of fuel to the furnace.
“Despite these backlogs, the fires of market activity should continue to burn bright and this will help carry the market through the traditionally quieter winter period.”
Managing director of Barrows and Forrester, James Forrester, concurred: “High levels of homebuyer demand continue to grease the cogs of the UK housing market and this continued price growth is being primarily driven by second and third rung buyers looking for larger homes in the wake of lockdown restrictions.
“A second national lockdown will only intensify this trend and as a result price growth should remain stable in the mid-term at the very least. Hopes of a vaccine will also breath new life into the market with any chance of a downturn looking slim at present. However, the end of the stamp duty holiday and the furlough scheme could still pose a danger with many predicting the market could fall off a cliff as demand dries up.”
While we are likely to see some seasonal slowdown in the market, many buyers are still eagerly pushing to get their transaction over the line before they run out of time to make the deadline.
Iain McKenzie, CEO of The Guild of Property Professionals, said: “Pent up demand from Brexit and the first lockdown created a property buying frenzy that was spurred on the stamp duty holiday in July. The house price index will be reflecting the sales that were prompted by the stamp duty holiday and will benefit from it.”
But Anthony Codling, chief executive of property platform Twindig, warns that the increase in transactions is slowing, which suggests that some purchasers may not meet the stamp duty holiday deadline of 31st March.
He said: “The stamp duty holiday may be working, but it seems that mortgage, surveying and conveyancing bottlenecks are acting as a brake on the UK housing market and may lead to many missing the stamp duty deadline.”
According to online mortgage broker Trussle, the average time from mortgage submission to approval has increased by 50% compared with the same time last year, from 16 days to 24 days, due to lenders being overwhelmed by applications.
The data also demonstrated that the average completion time of transactions differs across the country, with the median time it takes in the East Midlands at 166 days, compared to a significantly shorter 96 days in the South East.
Miles Robinson, head of mortgages at Trussle, commented: “As the market draws closer to the stamp duty deadline and Christmas, which is typically a quieter time of year for the market, it is likely demand will begin to slow.”
The table below outlines the median days to complete in regions across the UK with the longest length of time to the shortest:
|REGION||AVERAGE DAYS TO COMPLETE||START YOUR MORTGAGE BY THIS DAY||SURGE IN NO OF LEADS (%)
SEP – OCT YOY
|East Midlands||166||16th October 2020||Deadline passed|
|East of England||157||26th October 2020||Deadline passed|
|London||149||2nd November 2020||Deadline passed|
|North West||128||23rd November 2020||61%|
|West Midlands||120||1st December 2020||93%|
|Yorkshire & Humber||115||6th December 2020||75%|
|South West||111||10th December 2020||113%|
|North East||111||10th December 2020||147%|
|South East||96||25th December 2020||99%|