House prices to ‘soften’ in early autumn – ‘slowdown is inevitable’, claims expert

House prices have continued to boom over the last few months with the average price agreed for a home hitting £330,279 in June 2021. Reallymoving is predicting that this will increase to £342,767 in July 2021 and £344,264 in August 2021. The reallymoving house price forecast which was released yesterday has predicted that house prices will grow in England and Wales by 3.8 percent in July with the rate declining in the following months.

The rate of annual growth is showing a similar trend to monthly figures, falling from +15.7 percent in August to +6.3 percent in September – a decrease of more than half.

Reallymoving looked at the purchase price buyers have agreed to pay when they search for conveyancing quotes through the comparison site, typically 12 weeks before they complete.

The site was able to provide a three-month house price forecast.

Rob Houghton, CEO of reallymoving, said a “slowdown” in house price growth is “inevitable”.

He added: “Looking ahead over the next three months, the data indicates that the market is softening which will be reflected in completed sales data heading into the autumn.

“With the influence of the stamp duty holiday now largely expired alongside early signs that buyer demand is returning to more normal levels, we can expect prices to follow suit and return to a more stable trajectory.”

Despite house prices slowing down, Mr Houghton said he thinks the property market will continue to “perform well”.

The rise in home-working, a shift in buyers’ needs and a move away from urban locations is likely to continue driving the market.

Mr Houghton said: “Working arrangements for many people are yet to be tested and finalised, with the rise in home-working no doubt continuing to drive home movers for some time to come.

“There will be a contingent of buyers who realised pretty quickly that rising prices were wiping out any tax savings and decided to hold off until the market cooled, who, along with First Time Buyers who largely didn’t benefit from the stamp duty saving, may decide to make their move later this year.”

First time buyers paying £300,000 or less for a residential property also don’t have to pay Stamp Duty Land Tax (SDLT).

They will, however, have to pay between £300,000 and £500,000 of SDLT at five percent on the amount of the purchase price in excess of £300,000.

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