UK house price growth soars as buyers race to beat end of tax holiday
A rush to beat the end of a tax holiday, low interest rates and a pandemic-driven boost in demand turned the UK housing market into the “wild west” this month, pushing up house price growth to its fastest pace in nearly 17 years, the Nationwide Building Society has revealed. The UK Nationwide house price index rose 13.4 per cent in June compared with the same month last year, the biggest jump since November 2004. Prices increased 0.7 per cent compared with the previous month and about 5 per cent compared with March, pushing the average residential property price to £245,432 — a new record high. Tobi Mancuso, director of property investment company Track Capital, said the housing market was “like the wild west at the moment — and properties are flying off the shelves whether they’re good, bad or ugly”. “A scarcity of properties and the stamp duty holiday has created a situation where buyers feel like they’re in the last chance saloon, creating panic buying and pushing up asking prices,” he added. House price growth has accelerated since July when the government introduced the stamp duty exemption on the first £500,000 of primary residential property purchases. The full stamp duty holiday ends this month, and it is tapered before it returns to the original rates on October 1, meaning buyers can save up to £15,000 until Wednesday.
Separate data published by the Bank of England on Tuesday showed consumers borrowed in May more than they paid off for the first time since last summer as the easing of Covid-19 restrictions boosted spending and reduced savings. Consumers’ net borrowing was £0.3bn in May, up from a net repayment of £0.2bn in the previous month and the first positive figure since last August. The Bank of England also revealed that net mortgage borrowing “bounced back” in May, following variability in the previous couple of months in anticipation of the reduction in stamp duty ending. Mortgage approvals also rose in May compared with the previous month and remain well above pre-pandemic levels.