UK house price growth started to ease in August as the market calmed down from a frantic rush to buy spurred by the Chancellor’s stamp duty holiday, a survey showed.
Prices rose faster than normal in August but the rate slowed from sharp increases recorded in early summer, the Royal Institution of Chartered Surveyors’ (Rics) survey of estate agents showed. The net balance, which shows the difference between agents reporting rising and falling prices, was +73 compared with +81 in May and early June.
Prices are likely to keep rising over the next 12 months after a lull, the survey showed, with a net balance of +66 expecting increases in the coming year.
Other indicators showed the market cooling as new listings and the number of homes sold dropped though sales are expected to stabilise in the coming months.
The UK property market has been in overdrive for the past year, fuelled by Chancellor Rishi Sunak’s temporary cut to stamp duty, which finishes at the end of September.
Buyers rushed to buy properties to take advantage of the cut, though its effects were more than offset by price rises. The market was also supported by households rethinking their requirements faced with the prospect of working from home.
Tarrant Parsons, an economist at Rics, said: “The latest survey evidence inevitably points to market activity taking a breather following the flurry of sales seen ahead of the tapered stamp duty holiday withdrawal. That said, while momentum has eased relative to an exceptionally strong stretch earlier in the year, there are still many factors likely to drive a solid market going forward.
“Given the real shortfall in new listings becoming available of late, there remains strong competition amongst buyers and this is maintaining a significant degree of upward pressure on house prices. Prices are expected to continue to climb higher over the year to come, albeit the pace of increase is likely to subside somewhat in the months ahead.”