House prices jump 7.6%! Industry reaction to the latest UK House Price Index

The latest Gov UK House Price Index on sold prices shows that:

  • UK house prices jumped 1.2 in November on the previous month.
  • They also saw a huge 7.6% increase.

Director of Benham and Reeves, Marc von Grundherr, commented: “Such strong movement in sold prices so close to the Christmas period demonstrates that the market uplift spurred by the stamp duty holiday was far from a flash in the pan.

“That said, it’s fair to say that the stamp duty holiday deadline has effectively already passed for many homebuyers stuck in the current backlog, certainly for those planning to buy but yet to enter the fray.

“We’ve already seen a slight realignment in asking prices, as buyers are no longer offering at higher price points due to the added confidence that they’ll secure a saving.

“Despite this, the market continues to move forward and while we may see a cool in the rate of house price growth this year, property values look set to continue their upward curve far beyond the end of March.”

Managing Director of Barrows and Forrester, James Forrester, commented: “A 7.6% annual increase is pretty astonishing and demonstrates the momentum that is now driving the UK market forward at a rapid pace.

“We’ve seen a sustained level of strong growth for some months now and this is largely due to more demand but also as a result of buyers who will have stretched their budget and the price they’re willing to pay for a home due to the money they will have saved on stamp duty.

“Although it’s only natural that this rate of house price growth will slow once the stamp duty holiday deadline arrives, any predictions of market activity evaporating overnight are grossly exaggerated.

“The vast majority of homebuyers haven’t committed to the most expensive purchase of their life, solely to save what is comparably a very small amount in stamp duty.

“So while it’s a lovely incentive to transact and a great saving for those who secure it, the end of the stamp duty holiday isn’t going to deter those with plans to buy beyond March of this year.”

Founder and Managing Director of HouseScan, Harry Yates, commented: “Homebuyers in the new-build sector seem to be facing longer delays than most with regard to current completion times, with some having had offers accepted as far back as May last year.

“However, while a smooth and swift transaction is always preferable, they remain less desperate to complete prior to the March deadline when compared to those buying in the regular market. This is largely due to many developers offering further incentives to buy in the form of a stamp duty saving safety blanket, covering the cost for those that miss the boat, so to speak.

“As a result, said boat is far less likely to rock come April when some buyers in the regular market could find themselves having to stump up as much as £15,000 more than planned.”

Founder and CEO of GetAgent.co.uk, Colby Short, commented: “If you’re currently considering a property purchase with the sole motivation of a stamp duty saving, prepare for disappointment.

“It is now highly unlikely that you will see a sale complete in time left and there remains a very long queue of hopeful homebuyers who have seen their purchase become stuck in the mud of an out of date legal process.

“While you can always roll the dice, it’s extremely important you don’t commit above and beyond your financial means and leave enough in the kitty to fully cover the cost of buying.”

CEO of Keller Williams UK, Ben Taylor, commented: “Although homebuyers have remained focussed on the current stamp duty holiday, the underlying issue of mortgage availability has been growing in the background.

“Many buyers have been scrambling to purchase and finding that they’re simply not in a strong enough position to do so financially, as lenders tighten their lending criteria, particularly for those with a larger degree of financial instability.

“While the market remains in rude health, any wobble in house price appreciation is going to come as a result of declining demand due to mortgage restrictions, rather than the expiration of the stamp duty holiday.”