Andy Sommerville, Director at Search Acumen, comments on the new record high for UK house prices in today’s ONS UK House Price Index for June 2021:
“The 13.2% annual increase in house prices for June, fuelled by a rush of Stamp Duty-averse homebuyers, has left a mountain to climb not only for first-time buyers’ deposits, but also for legal professionals in terms of processing transactions on time. The tapering of the Stamp Duty holiday since June has finally started to cool down a market that has been red hot since last summer. Sellers may have to reconsider their pricing while some buyers who were prepared to stretch their finances might not be in a position to do so now they are facing a larger tax bill.
“However, we expect only a brief summer interlude before house prices start to grow again in the Autumn. Demand is still extremely high by historic standards, fuelled by record low interest rates and people’s attempts to adapt their lives to key societal changes, such as home working, which are set to become a more permanent feature of the post-pandemic world. At the same time, the market is still characterised by a chronic undersupply of available housing stock. These two factors are likely to sustain house price growth later this year.
“The conveyancing sector has now been operating at full capacity for the best part of a year, keeping the market moving despite unprecedented levels of demand and the once-in-a-generation challenge of the pandemic. As the pressure eases briefly, there is a crucial window of time to reflect on lessons learned. Technology has created efficiencies during the pandemic, and forward-thinking property firms have had a taste of how data-driven decisions and real-time access to information can improve the customer and adviser experience.
“Wider adoption of data-led ways of working can help to cope with the busy market we expect to see during the autumn and into next year.”