Following the Halifax House Price Index for August, please find comments below from the Assetz Group and property consultancy Knight Frank…
Stuart Law, CEO of the Assetz group, said: “While it is generally expected that house price growth will simmer over the next few months as the stamp duty holiday comes to an end, we do not expect this slowdown to last very long. Deep-rooted changes in consumer trends brought on by the pandemic will continue to stimulate house price growth over the longer term as homeowners look for larger homes in more rural areas going forward.
“We are already seeing some of the effects of this, with London again recording particularly weak annual house price growth. As more and more businesses look to employ a hybrid way of working in future, we expect this trend to continue with house price growth in more rural, open areas such as Wales and the North of England outstripping the capital now people no longer have to commute to work five days a week.
“While some house price growth is positive – particularly when it helps balance out property prices across the country – there is a risk that the market may overheat if these shifting demands are not met with sufficient new housing stock that fits the post-Covid criteria. Housebuilders, however, can help moderate this growth, with SMEs in particular utilising their expert local knowledge and ability to adopt innovative housebuilding processes at speed to create more housing stock and meet changing consumer needs.
“We have already received hundreds of millions of pounds worth of loan applications from housebuilders looking to leverage this opportunity and help meet the nation’s housing demands, however broader support is needed in the form of increased funding and streamlined planning processes to create a more sustainable market environment over the longer term for all.”
Tom Bill, Head of UK Residential Research at Knight Frank commented: “Like a bad Hollywood blockbuster, the UK housing market looks like it will have a predictable finale this year after an explosive start. Demand remains robust and the economic backdrop increasingly has a feel-good factor as Covid disappears into the rear-view mirror. The key question is by how much supply picks up as autumn approaches. We expect seasonality and needs-driven buyers to play an important role in driving supply higher, which should start to curb house price growth. We therefore expect to end the year in single digits.”