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House prices rebound to record level as activity surges

Pent-up demand and temporary stamp duty reforms have led the recovery
House prices rebound to record level as activity surges

UK house prices recorded the highest monthly growth so far this year during July, as pent-up demand and the stamp duty changes have spurred activity.

Sales prices were up 1.6 per cent last month, compared with June, and rose an annual 3.8 per cent, according to the latest Halifax House Price Index. The average house price, £241,604, was the highest level since the index began. 

The figures chime with reports from Rightmove (RMV) of a 50 per cent surge in searches for sales properties during June and July. Since the housing market restarted on 13 May, the property portal said it had enjoyed a record 65 days of traffic, beating its previous traffic record set on 19 February. 

That followed a 3.3 per cent decline in membership during the first half of the year, as agency branch members and new homes developments reduced while the housing market was in lockdown. Together with the 75 per cent discount offered to members during the pandemic, that led to revenue falling by more than a third. 

Estate agency Savills (SVS) also reported an 8 per cent decline in UK residential revenue over the first half due to lower transactional activity. However, a record number of transactions went under offer in June, it said, with the recovery primarily in the “country market” as buyers sought more outside leisure space.  

The numbers come a day after the government unveiled a shake-up of planning reforms, which will restrict local councils' ability to oppose new developments, and are aimed at simplifying and speeding up the construction of houses. 

However, as government support measures come to an end, there is still a great deal of uncertainty around the outlook for the housing market, according to Halifax managing director Russell Galley. 

“In particular, a weakening in labour market conditions would lead us to expect greater downward pressure on prices in the medium-term,” he said.