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House prices to rise in June but still 11% below December peak

House prices to rise in June but still 11% below December peak 1024 576 NGI Residential Mortgages

House prices are forecast to pick up in June after several consecutive month-on-month declines in the early months of the year from a peak of £343,198 in December, according to analysis by Reallymoving.

The website captures the purchase price buyers are planning to pay when they search for conveyancing quotes through its comparison service.

Buyers typically search for quotes twelve weeks before their purchase completes, which provides an indicator of house price trends over the months ahead.

The predictions are complicated by the fact that those searching for quotes in the run-up to the Budget were doing so in a market which was still factoring in the end of the stamp duty holiday in March.

Chancellor Rishi Sunak’s decision to extend the tax relief window to June and then gradually taper it back from September, has reinvigorated the market.

According to Reallymoving’s figures, prices dropped from £343,198 in December to £338,951 in January,  £321,659 in February and then to £313,325 in March.

Based on the figures entered by buyers searching for quotes on the website, Reallymoving is forecasting that prices will stay broadly flat in April at £312,120, before dropping 5.3% in May to £296,560 and then recovering by 2.8% to £304,782 in June.

The figure predicted for June is still 11% lower than the December peak, but 4.4% higher than the same month in 2020.

Conveyancing quote volumes began to accelerate around Budget Day on March 3 and by the middle of the month had reached 51% above normal levels, rising to 101% higher by the end of the month.

Reallymoving chief executive Rob Houghton says: “Agents and portals across the UK have been reporting a surge in buyer demand following the stamp duty extension announcement, and now through our analysis of conveyancing quote data, we’re seeing the first clear evidence that this activity has led buyers and sellers to agree deals at higher prices in March, which will become evident in Land Registry data in the early summer.

“Many homebuyers have cash in the bank, money is cheap to borrow and, with lockdown restrictions now beginning to ease, people are feeling optimistic about a future where they may be less tied to an office-based 9- 5, giving them greater freedom to live where they choose.

“First-time buyers are currently enjoying a 56% market share and with the first government guaranteed 95% loans expected to become available any day now, we’re optimistic that they will continue to maintain these activity levels despite greater competition for homes and rising prices.”

* Content Source – Mortgage Strategy.