Land Registry: annual rate of house price growth falls in July

ended 14. September 2021

The annual rate of house price growth fell from 13.1% in June to 8% in July, according to the latest data from the Land Registry.

Below is reaction from 7 property market experts…

7 responses from the Newspage community

Star Quote
"Looking forward, we are likely to see some calming in the rate of price growth, due to the withdrawal of the stamp duty holiday stimulus and valuation reports coming back with figures lower than the agreed purchase price: the dreaded down-valuation. Given these factors I'd expect to see a cooldown in the rapid price growth we've seen over the past year and a levelling off of prices for a while. The big risk is employment and the end of furlough."
Star Quote
"The property market will have a lot on its plate in the year ahead. The looming increases in National Insurance and income tax on dividends will mean less money in people's pockets at the end of the month, and therefore less to save towards a deposit. Psychologically, confidence will take a hit, too, which impacts demand. This is likely to lead to a slowdown in house price growth. Another impact of the tax increases is lenders being prepared to lend less to a borrower, which means the amount people offer will be lower. And don't forget the furlough scheme ends at the end of the month, which is likely to lead to an increase in job losses."
Star Quote
"Though the annual rate of price growth has cooled, a chronic shortage of housing stock and rock bottom mortgage rates even at higher loan-to-values, means prices are unlikely to fall. That said, if the economy begins to falter due to Brexit, COVID and the unwinding of the furlough scheme, coupled with another potential national lockdown, we could see demand weaken as people sit tight."
Star Quote
"Make finance more accessible and what people will borrow will increase, which in turn will drive up house prices. This is a major contributor to the price growth of the past year. Before the pandemic, you’d have been hard pressed to find a mainstream mortgage lender to lend more than 4.5 times a typical first time buyer’s income. Today, a first time buyer can borrow up to 5.5 times their income with a mainstream high street lender. This allows them to massively increase what they can bid on their first house. Multiply this by hundreds of thousands of first-time buyers now able to borrow tens of thousands of pounds more, all competing with one another for the same number of houses, and the result is higher prices."
Star Quote
"Even with the stamp duty holiday coming to an end, there is still strong demand for property. Houses with gardens are incredibly popular while many buyers in prime and sought after areas still have to submit sealed bids or make offers over the asking price. To add fuel to the fire, mortgage lenders are constantly undercutting each other and incentivising borrowers with their cheapest ever rates."
Star Quote
"Having risen spectacularly on the back of the stamp duty holiday, house prices seem to be holding at record high levels with no sign of falling. The main driver is now record low-interest rates with the base rate remaining at an all-time low of 0.1%, and lenders cutting mortgage rates on an ongoing basis. Despite concerns over inflation, these record low interest rates seem unlikely to increase anytime soon. With the government embarking on a well-publicised round of tax hikes, low interest rates will need to continue to help the economy recover."
"Supply and demand isn't rocket science. As long as we build fewer houses than are needed and mortgage finance is cheap and accessible, house prices will continue to rise in a market where there still appears to be tens of potential buyers for every single property that hits the portals. A sure as eggs is eggs, what we'll likely see though is that the stats will show a slight slackening over the summer as is the case in any normal year and then a ramping up between now and November as people try to move for Christmas. The normal breathing in and out of a strong housing market."