Halifax’s latest research found London house prices fell slightly in August – down 0.3 per cent – and are only up a modest 1.3 per cent year on year.
But so many homes have been snapped up during the stamp duty holiday that most agents feel a serious shortage of supply will stop significant falls — and indeed Savills forecasts that mainstream property prices in the capital will rise by just over 12 per cent by the end of 2025.
The latest UK Residential Market Survey by RICS found that demand levels had subsided slightly in August – a traditionally slow month as so many people are away on holiday. But so did the number of homes on offer. Stock levels on estate agents’ books is down from an average of 42 homes per branch in January to 38 today.
Allan Fuller, managing director of Allan Fuller Estate Agents, said that in Putney demand for family houses was still strong although “less frenetic” than at the height of the Stamp Duty holiday.
In north London Jeremy Leaf, principal of Jeremy Leaf & Co, agreed that demand had “softened” since the Stamp Duty holiday started being phased out. “But the market hasn’t run out of steam,” he said. “Prices and activity continue to be supported by shortage of three and four bedroom houses in particular, and competitively-priced finance.
Tom Bill, Knight Frank’s head of UK residential research, suspects that the final four months of 2021 will be anti-climactic compared to the manic period of buying that preceded it. “Activity will be brisk,” he said. “It just won’t be frenetic.”
He pointed out that the number of new buyers registering last month was 24 per cent higher than the five year average.
The number of new homes coming on to the market, however, is eight per cent less than the five year average for August.
“Some prospective sellers will be encouraged by the brightening economic outlook, ultra-low mortgage rates, calmer market conditions, and sense that the worst of the pandemic is behind us,” said Bill.
“Less needs-driven owners will want more time to assess the wider social and economic fallout from Covid-19 and may see Christmas as a natural moment to reconsider.
“The question of how much supply builds, and the associated impact on prices and transaction volumes, will depend on the size of these two respective camps.”