Buyers leaving London post-lockdown caused summer mini-boom

The UK property market is undergoing a record-smashing summer mini-boom, with the number of sales from mid-July to mid-August scoring more than £37 billion.

The post-lockdown activity-increase also saw the highest number of houses being put up for sale since March 2008, in contrast to the typical summer sales pause, according to Rightmove’s monthly house price index.

The average monthly fall in asking prices at this time of year has been 1.2 per cent over the past ten years, the property website said. 

However, as the departure from urban centres continues, the new figures show that prices are rising in 10 out of 12 regions, reaching record highs in seven areas. 

In Scotland and the Midlands, asking prices grow 6.3 per cent year-on-year, while in Wales they increase 5.8 per cent.

The London exodus

The report highlights a notable shift from London and the South-East – the only two regions seeing a fall – as the options of remote work and the desire for more space after lockdown take hold. The two areas have seen the lowest annual rise in demand prices, with the London figure rising by two per cent to £629,000.

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“More property is coming to market than a year ago in all regions, and at a national level the new supply and heightened demand seem relatively balanced,” said Rightmove’s Miles Shipside. “However, those expressing most want to move on are unsurprisingly in London and its commuter region.

“London has 69 per cent more properties coming to market, with the South-East at 60 per cent and the East at 56 per cent. With work and transport patterns potentially changing most around the capital, commuter belt properties need to have more appeal to prospective buyers than just proximity to a station.”

Stamp duty holiday

This comes as buyer interest continues apace following the two-month property market lockdown hiatus, and also pushed on by the eight-month stamp duty holiday that was announced at the beginning of July.

The tax break is intended to support buyers who have taken a financial hit because of coronavirus and boost a market hit by the lockdown.

Providing they complete before March 31 next year, buyers of homes priced up to £500,000 will pay no stamp duty, while those purchasing above that level stand to save up to £15,000 in tax.

Before Chancellor Rishi Sunak announced the measure in his summer emergency Budget, first-time buyers paid no stamp duty up to £300,000 in any event. Still, the new benefit stretches to all sectors of the market.

The latest Rightmove statistics reveal sales agreed in the period rose 59 per cent year on year for homes at the top of the ladder, 38 per cent in the second stepper market, and just 29 per cent for first-time buyers, previously the strongest rung of the property ladder.

However, a report from the Royal Institution of Chartered Surveyors last week predicted the boom could be relatively short-lived, with the majority of estate agents in London predicting house price falls over the next year. This is because of jobs uncertainty bites once the Government’s furlough scheme ends in October.