Halifax House Price Index May 2021

"Summertime, and the market ain't easing. Prices jumping, and the pressure is high. "May has been exceptionally buoyant, and thanks to Government-backed incentives and higher loan-to-value mortgages returning, it's a seller's paradise, with many first-time buyers being given a chance to jump onto the ladder. "We might see a slowdown once the Stamp Duty deadlines have passed and furlough ends, but the UK mortgage market is as booming as ever."

"The UK property market showed no signs of cooling at all in May with hordes of potential buyers ready to snap up properties as soon as they hit the portals. "The market is being driven primarily by first-time buyers, many of whom are cash rich after a year of being cooped up with the parents, with deposits saved and mortgage agreements in place. "The reality is that the Stamp Duty holiday is old news, with conveyancers having spent the last few months warning buyers that they were unlikely to meet the deadline anyway. Activity levels right now are being driven by a nation of aspiring homeowners looking to invest in a property. "House prices still to have room to grow in many areas of the country where properties are still affordable, and as long as supply doesn't come anywhere close to demand, prices can only go one way."

"We expected the market to slow down in May and for things to start to get back to normal as pubs reopened and people turned their attention towards booking summer holidays. "Instead, May was absolutely frantic, with first-time buyers for whom the Stamp Duty deadline is less relevant proving particularly active."

"In May, just as in April, the demand for property was unprecedented, particularly among first-time buyers and portfolio landlords. "Neither of these groups are particularly affected by Stamp Duty, and this is giving me confidence that there is strength in depth in the market. "I don't see the market as a bubble that is going to pop as there are still a lot of people out there who want to buy homes, the availability of mortgages at higher loan-to-values is improving, and there's a drastic lack of stock. The balance of power continues to favour sellers."

"Despite many lockdown restrictions being lifted, and bars and B&Bs competing with bricks and mortar, May saw absolutely no slowdown in the UK property market. "With so many active buyers registered on their books, in May estate agents continued to agree a significant number of sales before the adverts were even generated for distribution on Rightmove and Zoopla. "First-time buyers are by far the most active demographic in the market at present. With the return of 95% loan-to-value mortgages, helped by the mortgage guarantee scheme, first-time buyers are flooding the market in an effort to get that first foot on the property ladder. "Many conveyancers have been warning for a while that new instructions face the chance of missing out on the Stamp Duty holiday, but despite those warnings buyer enquiries continue to rise. While it might be the only holiday some buyers enjoy this year, it doesn’t seem to be the only factor driving demand: people want to move because the pandemic has changed what we need and want from our homes, specifically more space. "Demand is far outweighing supply at the moment. First-time buyers have elbowed their way to the front of the queue, but equally there are plenty of buy-to-let investors waiting to expand their portfolios. With increasing buyer enquiries and a tapering of the Stamp Duty holiday, there are no signs of a shift in supply and demand just yet."

"Though there is growing talk of a bubble, if you're looking for a long-term investment, the property market is still pretty secure. If you're looking for short-term profits, you should probably try crypto rather than property. "First-time buyers are certainly wary about the 'bubble' bursting and ending up in negative equity, and therefore ideally only want to take the plunge if they have a larger deposit. In that regard, the Government's mortgage guarantee scheme hasn't had quite the effect many thought it would, with many cautious buyers preferring to wait it out. "In May, the mortgage market was as busy as ever. Last month was the last chance saloon to get a sale over the line before the end of the Stamp Duty holiday. A lot of new applications were from landlords seeking to take advantage of this small respite from the 'landlord-hating' Government legislation of the past five to six years. "Buy property and you need to look to hold for a minimum of five years just to offset the purchase costs. Even if there is a dip or a bursting of the bubble, which is not guaranteed given the acute lack of supply, history shows the market will always recover. "People who bought now looking back in five years time will probably have done quite well and have more money than those who chose to wait and continued to pay rent every month."