MARKET DRIVEN BY HOME-MOVERS.

House prices grew by 1.8% in June, according to Nationwide. This puts annual UK house price growth at 10.9%, the highest level of annual growth since August 2014. 

This double digit house price growth has been driven by relentless buyer demand and dwindling supply. New buyer enquiries have continued to exceed new instructions, according to the RICS April survey, while sales agreed volumes have exceeded instructions to sell in May, according to TwentyCi. This supply/demand imbalance points to further house price growth over the coming months.

Shifting buyer priorities and market composition have been key factors. Home-movers, spurred on by the SDLT holiday and favourable interest rates for lower LTV mortgages, have joined the ‘race for space’, with many upsizing to larger homes with gardens. As a result, we have seen greater activity in the higher price bands, and a rise in the average size of home transacted. Strong value growth, putting more equity in home-movers’ pockets, will be an added advantage and may sustain high activity beyond the SDLT holiday.

Completed transactions in April were lower than the record-breaking levels seen in March as buyers rushed to beat the original stamp duty holiday deadline, but were still 59% above the 2018-20 average. Sales agreed remain high, 42% above the month’s 2017-19 average. And so we anticipate another boost to transaction numbers in June, as the first deadline to benefit from the maximum £15k stamp duty saving is reached.

The average UK rent increased 1.2% over the year to April, according to the ONS. Rents grew the most in the South West and East Midlands, up 2.3% in both regions, and least in London, up 0.1%. London was the only region to see rental falls over the last month and quarter, suggesting a slower recovery here than other parts of the rental market.

Annual house price growth to February was strongest in the Scottish Borders, at 14.6%, followed by the Cotswolds at 12.7%. House prices fell most over the same period in Aberdeen at -1.4% and Westminster, at -0.3%.