Another day, another head-spinning house price inflation report
The latest – a 7.6 per cent annual increase in the 12 months to July – was hailed by its author Halifax as a sign of a “cooling market”.
Yes, the surge is below May’s 9.6 per cent. But it also follows a 4.3 per cent rise in the year to July 2020. On Halifax’s measure, the average house price has spiked from £232,679 to £262,221 in 24 months.
This means the stamp duty holiday – which started to unwind last month and ends in October – will have had a negligible impact on the supposed savings made in many purchases.
But at the sharpest end of the market, the boom’s effects are more insidious. Across the country, some of the largest rises have occurred where real estate is dominated by second homeowners.
A parallel increase in Airbnb rentals and landlord evictions now risks pricing out entire communities. According to Anthony Mangnall, the Conservative MP for Totnes, there are just 16 properties available for long-term rent in the nearby area of South Hams, population 86,000.
Mangnall and fellow Tory lawmakers in North Norfolk and Cornwall are among the advocates for emergency measures to double or treble council tax in second home hotspots. The Welsh government, meanwhile, is considering a register for holiday homes.
“We’re all addicted to house price inflation,” Lord MacPherson, the crossbench peer, recently told this magazine. Of course, this is a consequence of the way we have structured wealth as a nation.
But property, like any asset, cannot exist in a regulatory vacuum. When the price boom backlash spreads to the party of home ownership, one senses greater interventions may not be far away.
