Are property prices still going up in Manchester?
With the stamp duty holiday coming to an end soon, we look at Manchester’s property prospects for the rest of 2021 with expert advice.
Property experts say Manchester is recording one of the strongest levels of house price growth among any of the country’s largest cities.
The North of England is also continuing to see extremely strong figures.
Buyers have been desperately trying to complete their purchases due to the stamp duty break and also the “race for space” as people seek properties with gardens and home working spaces because of the Covid-19 pandemic.
And although this is not expected to last throughout the year, price growth is forecast to continue all the way to the end of 2021.
What do the Manchester figures say?
Zoopla’s House Price Index for June 2021 showed Manchester recorded house price growth of 7.4%.
Of the UK’s largest cities only Liverpool (8.9%) and Belfast (7.7%) had bigger rises.
Some smaller towns, including Rochdale and Bolton in Greater Manchester, recorded even larger increases of 9% or more.
The national average was 5.4%.
Halifax’s House Price Index for July showed the North West was posting the strongest rates of annual house price inflation.
What does this mean for buyers?
The stamp duty break is starting to come to an end, with standard rates returning in October after a period of zero per cent duty on the first £250,000 of the purchase price.
This has led to a surge in buyer activity as people rush to get their homes bought before the window closes.
Savings of up to £2,500 are on offer until the end of September.
It is expected that the end of the year will bring a steadier period in the market.
On the other hand, while demand has dropped slightly from the peak in April, it is still some 80% higher for this time of year compared to more normal market conditions between 2017 and 2019.
Homes are also being made more affordable by ultra-low mortgage rates.
However, those looking for somewhere to live may find their lists of possible properties are rather shorter than anticipated as the supply of properties is not keeping up with the size of the queues of people looking to part with their hard-earned cash.
Zoopla reckons stock levels are currently 25% below the 2020 average.
Some experts are concerned that first-time buyers in particular will be pushed out by soaring prices.
It has also left people with precious little thinking time and even struggling to secure viewings, with some houses in hotspots being snapped up the day they go on the market.
Why has this been happening?
Mortgage experts say property transactions are being rushed through this summer due to the upcoming end of the stamp duty holiday.
Some first-time buyers are comparatively cash rich and, after 18 months of staycations and no foreign travel while being cooped up at home through lockdowns, are keen to find a place of their own.
Estate agents say they have also seen increasing numbers of parents and family members keen to assist young people to get onto the property ladder.
Continuing changes in working patterns, with far more people doing their jobs from home either some of the time or permanently, has also fuelled people’s desires to move.
Potential clouds on the horizon include the end of the furlough scheme and a possible rise in unemployment, but few experts think there will be a fall in the market, with expectations that prices will merely plateau.
There has been a marginal cool-down in July, but overall the property market remains strong.
What will the rest of this year bring?
Anyone hoping the later stages of the pandemic might herald a few bargains coming on to the market is likely to be somewhat disappointed.
Although house price growth is expected to slow slightly, the market should remain solid and the increase in the cost of homes will still be well in positive territory by the start of 2022.
This is all the more the case in the North of England, which as a whole has shown the way in terms of price inflation.
Houses are proving much more popular than flats, and heavily populated areas such as London and the South East are seeing some of the poorest performance figures of any region in the country.
As well as the North West and Yorkshire and the Humber, it has been a good year for homeowners in the South West and Wales in terms of the values of their properties.
Zoopla forecasts that there will be around 1.5 million completed transactions this year, up from one million last year, and the highest level since 2007.
What do the experts say?
Russell Galley, managing director at Halifax, said: “This easing was somewhat expected given the strength of price inflation seen last summer, as the market began its recovery from the first lockdown, and with activity supported by the start of the stamp duty holiday.
“In cash terms, typical prices now stand at just over £261,000, a little below May’s peak but still more than £18,500 higher than a year ago.
“Recent months have been characterised by historically high volumes of buyer activity, with June the busiest month for mortgage completions since 2008.
“This has been fuelled both by the ‘race for space’ and the time-limited stamp duty break.
“Although there remains some uncertainty over the impact on employment from the unwinding of government support schemes, on balance the risks to the macro-environment are receding, with consumer confidence improving, the labour market recovering, and the economy expanding as restrictions are lifted. “