House price growth to reach 11.4% spurred on by stamp duty

Annual UK house price growth will jump from -1.4% in August to 11.4% in October 2020, new research suggests.

The claim is based on the sales agreed in July and was made in House Price Forecast research from reallymoving.

The company said exceptional levels of demand from homebuyers post-lockdown are driving a sharp spike in house price growth.

There was pent up demand for homes during the lockdown, while the government’s stamp duty holiday has served to fire up the housing market further.

Rob Houghton, chief executive of reallymoving, said: “We’ve seen an unusual set of factors come together this summer which has created a significant surge in housing market activity, yet we expect price hikes to be short-term.

“This perfect storm has been driven by people having recently spent large amounts of time at home – prompting them to bring forward moves in order to seek additional features such as offices and larger gardens – combined with pent up demand that has been present in the market throughout Brexit and was heightened by this year’s storming spring market being suddenly stopped in its tracks. The temporary stamp duty changes have also provided a massive incentive to buyers to move now, rather than wait.

“The UK is now officially in recession and a sharp rise in unemployment is on the horizon when the furlough scheme comes to an end in October. Combined with the recommencement of mortgage repayments for thousands of homeowners who arranged payment holidays, households could find themselves under significant financial pressure. These factors will dampen demand for property through the late autumn and winter, which is likely to reverse the current spike in house price growth.”

Yearly house price stood at 4.6% in June. The report predicted it falling to -1.4% in August before rising to 4.7% in September and then 11.4% in October.