Stat Of The Week
The latest HPI is live, what did we learn?
The latest Halifax House Price Index (HPI) was recently published, revealing a continued rise in the record breaking house prices we have witnessed over the last few months. This revelation is completely in line with the trend we have been witnessing over the course of the pandemic, as we reported in our May Town Hall, the most recent HPI at the time recorded a +1.4% monthly increase in house prices, up +8.2% annually. These numbers are huge for the housing market, but the bubble has yet to burst, according to the latest figures from Halifax.
The most recent HPI reports a monthly increase of +1.3%, only a 0.1% decrease from the month prior. Coupled with this montly figure is a whopping +9.5% annual increase in house prices from the same time last year. These big figures are, in part, due to the uncertainty presented by the pandemic, forcing the market into a period of dormancy. However, with the national average house price hitting a new record high of £261,743, the market looks set to continue growing in strength.
On a broader scale, Wales continues to be the region with the strongest price growth, but the numbers look great across the board. To temper this somewhat, but full of confidence, we will elave you with the analysis of the Halifax’s Managing Director, Russell Galley:
“House prices reached another record high in May, with the average property adding more than £3,000 (+1.3%) to its value in the last month alone. A year on from the first easing of national lockdown restrictions, and the gradual reopening of the housing market, annual growth surged to 9.5%, meaning the average UK home has increased in value by more than £22,000 over the past 12 months.
Heading into the traditionally busy summer period, market activity continues to be boosted by the government’s stamp duty holiday, with prospective buyers racing to complete purchases in time to benefit from the maximum tax break ahead of June’s deadline, after which there will be a phased return to full rates. For some homebuyers, lockdown restrictions have also resulted in an unexpected build-up of savings, which can now be deployed to fund bigger deposits for bigger properties, potentially pushing property prices even higher.
Whilst these effects will be temporary, the current strength in house prices also points to a deeper and long-lasting change as buyer preferences shift in anticipation of new, post-pandemic lifestyles – as greater demand for larger properties with more space might warrant an increased willingness to spend a higher proportion of income on housing.
These trends, coupled with growing confidence in a more rapid recovery in economic activity if restrictions continue to be eased, are likely to support house prices for some time to come, particularly given the continued shortage of properties for sale.”