The average British house cost fell to £251,968 ($343,598) in January, the biggest monthly drop since April of the previous year, according to Halifax, as the country’s mini housing blast showed signs of running out of flow.
Whereas house prices were 0.3 percent lower from December, they were still 5.4 percent more than in January in the previous year.
“There are some early signs that the upturn in the housing market could be running out of steam, with the annual rate of house price inflation cooling to its lowest level since August,” said Russell Galley, managing director of Halifax.
“Industry figures for agreed sales remain well above pre-pandemic levels but new instructions to sell have decreased noticeably, and total stock held by estate agents has risen to its highest level since before the EU referendum in 2016.”
Britain’s real estate market was light in the previous year, with more loans approved in 2020 than in any other year since 2007, as per the Bank of England figures.
The strong loan figures were allocated to a temporary stamp duty land tax holiday, informed by UK finance minister Rishi Sunak last July.
While the tax cut ended on March 31, it provided the buyers to save as much as £15,000 and set in position the housing market even as the pandemic sent the wider economy into its deepest fall for the three centuries.
While the typical property cost is at present at its lowest level since October, costs are still about £13,000 higher than a year ago.
The stamp duty break will continue to fuel demand in the early part of this year “given the current time to completion across the market”, said Mr. Galley.
Analysts look forward to the “stamp duty cliff edge” could provide the way to fall down deals, with one in five of the 457,358 purchases made subject to contract at the end of 2020 likely to decrease, in terms provided by TwentyCi.
Loan approvals actually fell down to 1.8 percent in December, provided by the data by the Bank of England, and new purchasers’ activity also decreased, according to the Royal Institution of Chartered Surveyors.
Looking in the future, Mr. Galley said it is not clear how long the decrease will remain considering the challenges in regard to the pandemic.
“With swathes of the economy still shuttered, and joblessness continuing to edge higher, on the surface, this points to slower market activity and downward price pressures in the near term,” he said.
“That said, we saw the power of homeowners to drive the market in the second half of last year as many people looked to find new properties with greater space, spurred on by increased time spent at home. Such structural demand changes, coupled with any further policy interventions by government, could yet sustain underlying market activity for some time to come.”