Housing market growth continues as prices climb 1.6% in September

House prices across the UK were 1.6% higher in September than they were during August, according to the latest Halifax House Price Index.

Halifax’s data also showed that the latest quarter, from July to September, saw house prices 3.3% higher than in the preceding three months, between April and June, after September registered a third consecutive month of substantial gains.

The average house price now sits at £249,870, according to the index, with prices in September 7.3% higher than in the same month in 2019 – the strongest growth since June 2016.

“Context is important with the annual comparison, however, as September 2019 saw political uncertainty weigh on the market,” said Halifax managing director, Russell Galley.

“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 home movers than anytime since 2008.”

Galley also suggested that the housing market is “highly unlikely” to remain immune to the economic impact of the coronavirus 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,” he added. “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.”

Responding to the latest index from Halifax, Barrows and Forester managing director, James Forrester, commented: “It’s very likely that we will see this strong level of growth sustained as we see out the remainder of the year. However, with the furlough scheme coming to an end, this could be the final swan song before a period of muted market activity.

“The government has played its hand in anticipation of this with the promise of 95% mortgages for those struggling to get on the ladder. However, even a 5% deposit may prove financially unviable for those struggling to find work.

“So while the outlook is certainly a bright one at present, there may well be dark clouds on the horizon. There’s no doubt the market can weather this storm, but it's the duration and initial damage of that storm that remains to be seen.”

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