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Demand for homes falls 9pc as stamp duty holiday ends

As the initial stamp duty holiday ended in July the demand for property reduced by 9% but remains significantly up on normal market levels.

Demand for property has reduced by 9% after the July 1st initial end of the stamp duty holiday, according to Zoopla, although this remains 80% higher than normal market levels in 2017 and 2019.

The search for more space from first time buyers and home movers means demand remains historically high and this is driving house price growth last year up 7.3% for houses compared to 1.7% for flats.

On average house prices are rising at 5.4% for the year to June compared to 2.2% twelve months ago and are expected to be growing at 6% at the end of summer.

With low mortgage rates under 1% for a five-year deal, home movers can trade-up to a more affordable property if you do not need to borrow more than 60% of the value of your new home.

House price growth remains strong

With the supply of new homes on the market at an all time low house price growth remains strong particularly in Wales up 8.4% and North West of England up 7.3%, the highest levels for 16 years.

The cities leading the growth are Bolton, Hastings and Rochdale with 9% growth over the year with Liverpool up 8.9% and Belfast on 7.7%.

See how much you can borrow as a first time buyer to get on the property ladder for your home at this link:
First time buyer calculator with instant results and figures for your new property.

Since the previous market peak in 2007, house prices have increased by 30% and the average property value in the UK is now £230,700.

For older homeowners, if you have an interest only mortgage the rise in house prices offers the opportunity to use equity release to repay this amount without any evidence of earnings and no need to make repayments.

The only city to see house prices fall year-on-year is Aberdeen down -2.3% due to the decline in the oil industry.

Zoopla expects house prices to continue to rise especially in the more affordable areas of the Midlands and the North, slowing to 4-5% towards the end of the year as the stamp duty holiday unwinds.

London growth trailing the UK

On average house prices in London have been trailing the UK market with growth of 2.3% compared to 5.4% country wide.

Looking closer, the capital’s outer boroughs are performing better than central London with house price growth of 4-6% year-on-year for Redbridge, Havering, Bexley and Bromley.

Instead of moving home, remortgage buyers can benefit from higher house prices by extending their mortgage to improve your home such as adding more space with an extension.

There is stronger domestic demand in outer London which is 86% higher when compared to 2017 and 2019 at this time of year helped by a large supply of homes with outside space.

In contrast inner London demand is only 2% higher compared to typical market levels with prices for flats reducing by -0.5% in the year to June 2021.

House prices in Kensington & Chelsea, Hammersmith & Fulham and Westminster reduced by up to -2% over the year and could pick-up when global travel restrictions for Covid are relaxed.

What are your next steps?

Talk to our London City Mortgage brokers for advice if you remortgage your home to release capital and want the best mortgage deal. Learn more by using the property value tracker chart and equity release calculator.

Start your free remortgage quote and we can find the best mortgages and lowest rates when releasing capital at this link:
Free mortgage quote with the lowest remortgage rates for your home.

To release equity from your property for home and garden improvements, we can find the leading lifetime mortgages, so begin your equity release quote for the latest provider offers.

Mortgage Best Buys

These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.

1.17% Fixed Rate
60% Loan to Value
£1,025 App Fee
Until 31/09/2022
Reverts to 3.59%
1.18% Fixed Rate
60% Loan to Value
£1,034 App Fee
Until 31/10/2022
Reverts to 3.59%
1.16% Fixed Rate
60% Loan to Value
£1,525 App Fee
Until 01/11/2022
Reverts to 4.09%
1.19% Fixed Rate
60% Loan to Value
£999 App Fee
2-Years Time
Reverts to 3.59%

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    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.


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