“The slight dip in buyers will reduce the rate that house prices are increasing. However, this is a positive for the market, as the record increases were unsustainable long-term.”
Nationwide’s latest index shows annual house price growth reached a double figure of 10.9 per cent in May, the highest level recorded since August 2014.
Buying agent Henry Pryor also says a predicted increase in supply will help to moderate prices.
A record one in three properties (32 per cent) sold for more than the original asking price in April, according to NAEA Propertymark, compared to the previous record of 19 per cent in May 2014.
Pryor says: “I expect supply to pick up as people start to be more confident about having strangers around their home. This will provide more choice for those wanting to buy and act as a slight dampener on prices.”
Although the housing market has remained open throughout subsequent lockdowns, government advice on moving home in England, for example, recommends homeowners vacate their property during viewings to minimise unnecessary contact.
Meanwhile, government figures show three-quarters of the adult population have had their first Covid-19 vaccine as of June 1.
Beth Rudolf, director of delivery at the Conveyancing Association, also says prices may experience a short-term “blip”, as more properties come onto the market when Covid restrictions are fully lifted and demand drops with the tapering of the stamp duty holiday.
Rudolf added: “As people decide to move to suit their new working arrangements, we might also expect more supply.”
Demand for space to continue
A survey of employers from professional body CIPD found two-thirds (63 per cent) planned to introduce or expand the use of hybrid working, as working from home became more commonplace last year.
Just Mortgages’ Phillips says: “The shift to homeworking has increased the need for an extra bedroom to use as a study, or a garden to build an office in.
“There’s also been a trend away from city centres. Without the need to live in commutable distance from the office, people are moving to larger properties away from the often more expensive cities.”
Indeed, research from Nationwide in April found seven in 10 homeowners (68 per cent) would still be moving, or considering a move, if the stamp duty holiday had not been extended.