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  • Writer's pictureGavin Human

Are house prices really at lowest for a year?

Updated: Aug 24, 2021

Click bait headlines seem to work don't they? There have been different variations of the headline "lowest house prices in a year" across the media so I thought I'd share some insight about what this means, as well as a few points about the affect of coronavirus on house prices.

There seems to be some confusion on what is happening with regards to house prices. Rightmove (RM) recently (16th August 2021) reported that house prices have fallen for the first time this year, yet only today the Office of National Statistics report that the average house price across the UK increased by £31,000 to £266,000 over the last year.

Without doubt this has been lead by previous pent up demand pre-Brexit and the decision to suspend and waive Stamp Duty on properties worth less than £500,000, giving some buyers a saving of £15,000 if they moved before 30th June 2021. Even now, buyers can still save £2500 if they complete before the end of September 2021. We have certainly seen a change in what buyers want: moving out of traditional commuter routes, swapping city living for country living. Buyers who were previously not wanting commutes longer than 30minutes into Cambridge or an hour into London, are now prepared to take on longer commutes if they are only having to make those journeys once or twice a week.

When reading about house prices, it is important to understand what data you are reading. A lot of the papers will quote figures from property portals such as RightMove or Zoopla. Their data is based on asking prices and not sold prices. The most reliable Data is from Office National Statistic or land registry that are based on actual sold prices. The figures work on a two month lag, so the latest figures are for June and these show a 13.2% rise year on year.

In Cambridge and the surrounding villages we continue to see significant demand from London homeowners, keen to escape the capital. I have several friends who work for big London estate agents and they are reporting how difficult the market is and how many clients are reducing prices to secure a sale as the market becomes increasingly price sensitive.

We are certainly seeing a demand across all price brackets, not necessarily for bigger houses, but for better, more flexible layouts. Houses that can accommodate home working for two adults, and more green space. By that, I don’t mean always mean bigger gardens, but green space to go for walks to break up the day if working from home and needing to recharge the batteries.

My own view is that we will continue to see strong demand on the run through to Christmas as there is still an imbalance of supply and demand and there is certainly no indication that supply levels will suddenly increase.

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