September Market Update
We’re not surprised that house prices, according to the Halifax, rose 1.6% last month That’s nearly 20% per annum when annualised (but don’t do that)! The combination of at least three months of pent-up demand, coupled with stalling supply as people hunkered down during lockdown made such an increase inevitable, especially when compounded by the government’s SDLT giveaway of up to £15,000 per transaction.
Most people will accept that such growth, as a result of these unique circumstances, is unsustainable. Whilst there is some evidence of early economic recovery (the economy grew by 6.6% in July), the medium- to long-term impact of the pandemic is a concern, especially as the furlough scheme comes to an end, with inevitable increases in unemployment. And there is even word on the street of a possible “hard” Brexit once again.
However, political uncertainty and continual changes to property-related tax regulations have kept house prices in check for the past few years, giving a potentially overheated market some breathing space – so there has been some scope for prices to rise. Additionally, continued historically low interest rates are unlikely to exert the type of pressures that prompted forced selling during the financial crisis of 2008/9.
So our advice to sellers is as it was last month – make hay while the sun shines! With buyer demand currently running 34% higher than a year ago, this is no time to be “thinking” about a move. Christmas will be on us before we know it and those who take action now will be the victors – having taken advantage of this unique set of circumstances. Maybe there will even be a name for them – “The post-pandemic-pre-Brexit-visionaries” – try saying that while having a Coronavirus swab taken!