The scaling back of the stamp duty holiday has cooled the UK's frenzied property market, according to Nationwide. Figures from the building society show house prices dropped 0.5% in July. It comes after prices leapt 13.4% in June - the steepest rise in 17 years.
Nationwide's chief economist Robert Gardner said the rush to take advantage of the full stamp duty holiday saw housing transactions reach record levels in June. As a result, prices surged - effectively outstripping any savings made from the tax break. While stamp duty is due to return to its pre-pandemic rate by October in England, Nationwide said ongoing demand for larger homes in the wake of the pandemic was likely to continue supporting house prices.
House prices are almost a third higher than at their peak before the financial crisis.
A typical home cost £177,300 in December 2007 before plunging by 20 per cent. However, the average is now around £230,700 according to Zoopla - an increase of 30 per cent. Almost £12,000of the £53,400 rise was added in the past year as families started a 'race for space' following the first coronavirus lockdown.
That has seen buyers hunt for bigger properties with gardens and home offices, with demand also turbocharged by the stamp duty holiday. Grainne Gilmore, Zoopla's head of research, said: 'Demand is moderating from record high levels earlier in the year, but remains significantly up from typical levels. There is a continued drumbeat of demand for more space.'
Matt Oliver, City Correspondent, Daily Mail
Demand for houses is still outstripping demand for flats. To a certain extent this trend will have been supported by the stamp duty holiday, with bigger savings on offer for larger properties - typically houses.
but underneath this, there is a continued drumbeat of demand for more space among buyers, both inside and outside. That's funnelling demand towards houses, resulting in stronger price growth for these properties.
Overall buyer demand, coupled with constrained supply, signal that price growth will continue to rise in the coming months, peaking at around 6%, before falling back between 4%-5% by the end of 2021.
We may be allowed five more years to replace boilers in a major eco row. The PM is looking at pushing back a ban on sales of all new gas versions by 2035 after a furious backlash over costs.
The shift would give more time for new heat-pumps and hydrogen boilers to come down in price, and for businesses to pump extra cash into shifting people over gradually. People will be given the incentive to buy an eco-friendly heat pump but would be given extra time before the ban kicks in.
Government insiders are growing worried about the eye-watering cost of the PM's eco plans - which are set to slap the Treasury with a £400billion bill on top of Covid repayments.
Natasha Clark - The Sun
The average asking price of a home has jumped to £338,447 - a record high for the fourth month in a row and £21,389 higher than it was just six months ago, says property website Rightmove.
The first half of this year was the busiest it has ever recorded with 140,000 more sales agreed than average as the stamp duty holiday helped drive purchases.
The surge triggered a shortfall of 225,000 homes for sale with the average number available per estate agency branch at a record low of 16, compared to an average for this time of year of 31.