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Halifax House Price Index: Mortgage Applications Reach 12-Year High

Figures from this today’s September edition of the Halifax House Price Index reveals that mortgage applications have reached a 12-year high, while the annual house price has also seen a significant jump.

Buoyed by the savings on offer from the Stamp Duty Holiday, the latest results from the UK’s longest-running house price index showcase a healthy and rapidly growing property market which has seen a positive increase across virtually all indices.

According to the data in the report, the average house price in the UK is now £249,870, which represents a 3.3.% quarterly increase, and most impressively, a 7.3% increase on the same month last year.

Commenting on the strong results, Halifax’s Managing Director, Russell Galley, said: “The average UK house price is now approaching £250,000 after September saw a third consecutive month of substantial gains. The annual rate of change will naturally draw attention, with the increase of 7.3% the strongest since mid-2016.
Context is important with the annual comparison, however, as September 2019 saw political uncertainty weigh on the market.

“Few would dispute that the performance of the housing market has been extremely strong since lockdown
restrictions began to ease in May. Across the last three months, we have received more mortgage applications from both first-time buyers and homemovers than any time since 2008. There has been a fundamental shift in demand from buyers brought about by the structural effects of increased home working and a desire for more space, while the stamp duty holiday is incentivising vendors and buyers to close deals at pace before the break ends next March.”

The positive results also mark the fourth consecutive monthly rise in UK home sales with residential transactions up 15.6% in August compared to July, at a figure of 81,280.

One of the most impressive takeaways from this months report shows that the level of mortgage approvals have risen to their highest numbers since October 2007.

Figures from the Bank of England reveal that the number of mortgages approved to finance house purchases was 84,715 in August 2020 – this represents a rise of 28% from July and a 29% increase above August 2019.

However, despite the positive results, Russel cautiously warns that the impact of COVID-19 could pose a threat in the months ahead, as the economy and job market continue to suffer.

Russel adds: “It is highly unlikely that the housing market will continue to remain immune to the economic impact of the pandemic. The release of pent up demand and indeed, the stamp duty holiday can only be temporary fillips, and their impact will inevitably start to wane. And as employment support measures are gradually scaled back beyond the end of October, the spectre of increased unemployment over the winter will come into sharper relief.

“Therefore while it may come later than initially anticipated, we continue to believe that significant downward pressure on house prices should be expected at some point in the months ahead as the realities of an economic recession are felt ever more keenly.

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