"With the stamp duty holiday in place at least until March and hopefully longer, this should help support the housing market to a degree."
Survey respondents say the Stamp Duty holiday, introduced from the 8th July, is playing a significant role in lifting demand.
A headline net balance of +75% of survey participants noted an increase in new buyer enquiries over the month. This marks the second consecutive report in which demand has rebounded firmly following the lockdown-induced slump seen from March to May. Similarly, new listings rose sharply, evidenced by a net balance of +59% of respondents reporting a rise (up from a reading of +41% in June).
Alongside this, a net balance of +57% of respondents nationally saw a rise in agreed sales over the month, up from +43% last month. Furthermore, a positive reading was returned for the agreed sales indicator across all parts of the UK.
Looking ahead, near term expectations are signalling continued growth in sales at the headline level over the next three months. However, further out, twelve-month sales projections remain negative. Indeed, a net balance of -10% of respondents foresee sales tailing off over the year ahead, as caution remains on the likely reaction across the market once the furlough scheme is phased out in October and the Stamp Duty holiday expires after March 2021.
Turning to house prices, the survey’s headline gauge of price growth moved out of negative territory for the first time since March. Across the UK in aggregate, a net balance of +12% of respondents reported an increase in house prices during July, a noticeable turnaround on the reading of -13% registered in the June results. When disaggregated, prices rose to a greater or lesser extent in virtually all regions/countries covered.
London represents the sole exception, where a net balance of -10% of respondents cited a decline (albeit this is significantly less negative than the reading -54% posted beforehand).
As to the future, at the national level, a net balance of +8% of contributors expect prices to increase over the next twelve months. As such, this latest reading is consistent with a flat to marginally positive outlook for house prices in the year ahead.
Tomer Aboody, director of MT Finance, said: "With the stamp duty holiday in place at least until March and hopefully longer, this should help support the housing market to a degree. No doubt there will be some negativity and a potential fall in confidence after government schemes such as furlough have ended but a possible downward trend should be eased by banks already preparing a loss buffer (HSBC), allowing them to work more closely with borrowers who might be struggling with repayments.
"Those areas particularly hard hit are likely to be the top end of the market in the £5million-plus bracket for both houses and new-build flats, which are typically bought by investors from overseas who are looking for a central London holiday home or rental investment. With more people considering working from home more often, locations both in and out of London with a village feel, near green spaces, should hold strong and values could well increase.
"No doubt there will be challenges ahead but hopefully with debt remaining cheap, lenders could be more flexible, taking into consideration rates, LTVs, deposits and earnings, and getting back to old-school bespoke lending, rather than a tick-box exercise."
