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strong housing market fuelled by confidence

The strongest housing market in years shows no signs of faltering. Fuelled by confidence in the economy and low-interest rates, house prices rose by 0.4 per cent in July compared with June, according to the latest Halifax house price index.

Even though annual growth points to a cooling market, with prices up 7.6 per cent year-on-year compared with 8.7 per cent in June, this is partly explained by an unusually strong July last year when the first lockdown ended and the stamp duty holiday was introduced.

What’s more, the cooling in prices on an annual basis doesn’t apply everywhere. The national average property price conceals significant regional differences, with areas such as the northwest, Yorkshire & Humberside and Wales continuing to lead the way in terms of house-price growth. This isn’t surprising as these areas were more affordable in the first instance compared with London and the southeast, but also provide more green space, tying in with changing buyer sentiment, as well as the desire for more room, both inside and out.

Halifax’s findings were confirmed by Nationwide Building Society; the latter’s house-price survey also revealed that prices didn’t fall off a cliff in July, despite the end of the full stamp duty holiday, as many had feared might happen.

cheap borrowing

As confidence in the economy continues to grow, combined with the lack of property for sale and cheap borrowing, house prices are set to carry on rising. They might not increase at quite the same pace as they have been doing but they won’t be falling anytime soon either. With borrowing at its cheapest level ever, we expect this strong housing market to continue, even after the furlough scheme is wound down.

The Bank of England also reported a surge in net mortgage borrowing in June, hitting record highs, as buyers tried to take advantage of the stamp duty holiday before it started tapering off at the end of the month. But while this deadline focused buyers’ minds, those who missed the 30 June deadline have continued to proceed with transactions, aware that they can still take advantage of some stamp duty savings before the end of September.

The market is noticeably quieter as we head into August, as many people take much-needed holidays. It will be interesting to see how it picks up again in September, once people return from their vacations and children go back to school. Will that final push to take advantage of the tail end of the stamp duty holiday result in another uptick in transactions, keeping prices high?

how MT Finance can help

The approaching end of the stamp duty holiday has fuelled demand for bridging finance, as property investors and landlords take advantage of tenant demand to expand their portfolios in the second quarter, according to the latest Bridging Trends data. For anyone needing to raise funds fast, a short-term loan may be the answer.

At MT Finance, we can lend from £50,000 to £10m at up to 70 per cent loan-to-value with terms from 1 to 24 months. We will lend on residential, commercial, or semi-commercial properties, with loans agreed within hours. Do get in touch for more information on enquiries@mt-finance.com or 02030512331.

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