It’s official: exploding pent-up demand pushed house prices up in June

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House prices hit a new record in June with the reopening of the housing market and the publication of pent-up demand for housing following the Covid lockdown, official figures released today confirmed.

According to the Bureau of National Statistics.

Official housing price data for June confirms the UK’s mini housing boom, fueled at the time mainly by deals that were resumed after being put on hold by the pandemic.

The rise in house prices in June was driven by the resumption of purchases by buyers suspended due to the pandemic, according to the latest housing price index from the ONS and the cadastre

The June figures mainly reflect offers made and accepted in late March and April, when estate agents had to go out of business due to the foreclosure, but were then allowed to reopen, at least in England, from May 13.

“The price increase in June 2020 may reflect some degree of pent-up demand following the easing of foreclosure restrictions, particularly at the higher end of the price scale,” the report says.

Shaun Church, director of mortgage brokerage at Private Finance, says the numbers reveal the extent of the impact of the “sudden explosion” in pent-up demand on house prices after the real estate market reopens.

“The price hikes were sparked by an influx of buyers who resumed shopping during the lockdown immediately after restrictions were eased,” he said.

But the report also warned that the impact of the coronavirus on home sales – which hit bottom during the lockdown and is still below pre-Covid levels – means larger-than-usual revisions will need to be made. made to the house price index estimates.

The Land Registry and the ONS only recently began publishing their index after suspending it in May due to the difficulty in collecting accurate sales data for the blocking months.

Real estate transactions in England rose 28% between May and June, but at 61,780, they were still 37% below June level a year ago, according to the latest seasonally adjusted figures from HMRC.

Anthony Codling, managing director of real estate platform Twindig, said we should pay more attention to transactions than house prices, to get a clear idea of ​​the direction of the market.

“House prices do indeed continue to rise, but with mortgage rationing becoming a reality, it will be interesting to see how quickly transactions in the housing market recover and it is transactions rather than housing prices. that drive the housing market, ”he said.

Jamie Durham, an economist at PwC, said: “As the index captures deals closed in June, it is likely that many sales were made before the foreclosure, but the proportion of sales agreed after the foreclosure will increase. “

Official data confirms what other surveys have already said, with the price hike appearing to have continued through the summer months, as surveys in Halifax and nationwide show.

However, commentators seem to agree that the price spike is unlikely to last, with economists at Cebr predicting a 14 percent drop in prices next year when the stamp duty holiday ends and job losses will increase further.

Most regions saw strong house price growth in June, latest official data shows

Most regions saw strong house price growth in June, latest official data shows

House price growth of more than 4% in many regions

House price growth has been strong across the country, with five of England’s nine regions posting annual price increases of more than 4%.

Prices in London rose 4.2% on an annual basis, strong growth after the capital experienced a period of relative weakness since the Brexit referendum.

The highest annual growth was recorded in the East Midlands, where average house prices rose 4.5 percent, while prices rose the lowest growth in the northeast, where prices rose 1.7 percent.

The highest annual growth was recorded in the East Midlands, where average house prices rose 4.5%, while the lowest occurred in the North East, where prices rose 1 , 7%.

The highest annual growth was recorded in the East Midlands, where average house prices rose 4.5%, while the lowest occurred in the North East, where prices rose 1 , 7%.

Townhouses and townhouses saw the strongest price growth, up 4.2% and 4.1% respectively. In comparison, apartment prices rose only 0.9 percent.

According to Anna Clare Harper, author of Strategic Property Investing, this is the result of new post-Covid trends that see people looking for bigger and greener spaces.

“The performance of the housing market in June sounds like a distant story, but tells an interesting story based on changing tastes and preferences,” she says.

“It’s not surprising: both qualitative and quantitative data indicate that people want more space, especially outdoors,” she adds.

In demand: Townhouses and semi-detached houses saw the strongest price growth

In demand: Townhouses and semi-detached houses saw the strongest price growth

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