Annual house price growth eased in July, hitting its lowest level since March amid signs of a “cooling market” as the stamp duty holiday ended, according to the latest survey from Halifax.
House prices rose 7.6% on the year, down from 8.7% growth in June. On the month, however, prices ticked up 0.4% in July to £261,221, having fallen 0.6% the month before.
Russell Galley, Managing Director, Halifax, said the annual easing was somewhat expected given the strength of price inflation seen last summer, as the market began its recovery from the first lockdown, and with activity supported by the start of the stamp duty holiday.
The stamp duty holiday, introduced by Chancellor Rishi Sunak last July to bolster the housing market, ended at the end of June, after being extended from 31 March. It meant that no tax needed to be paid on the first £500,000 of property purchases in England and Northern Ireland.
Galley said: “Recent months have been characterised by historically high volumes of buyer activity, with June the busiest month for mortgage completions since 2008. This has been fuelled both by the ‘race for space’ and the time-limited stamp duty break.
“With the latter now entering its final stages (the zero percent rate only applies to the first £250,000 of the purchase price, before reverting back to standard rates from October), buyer activity should continue to ease over the coming months, and a steadier period for the market may lie ahead.”
Galley said that overall, assuming a continuation of recent economic trends, the housing market should remain solid over the next few months, with annual price growth continuing to slow but remaining “well into positive territory” by the end of the year.
