U.K. Homeowners Count Gains After Tax-Cut Fueled Buying Frenzy

Source

U.K. homeowners gained more than 21,000 pounds ($29,000) of wealth on average over the last six months after a buying frenzy triggered by a temporary tax cut and rising consumer confidence.

Property portal Rightmove said asking prices for property rose 0.7% in July -- the biggest increase for the time of year since 2007 -- to a record 338,450 pounds. It took the gain since January to almost 7%.

The surge came amid the busiest first half on record as coronavirus restrictions eased and buyers rushed to seal deals in time to benefit from a government tax break. Demand is expected to remain strong despite the phasing out of the stamp-duty holiday, and a shortage of properties for sale is now acute, Rightmove warned.

Prospective purchasers are facing “the lowest choice of homes for sale that we’ve ever recorded, continuing price rises and stretched affordability,” said Rightmove director of property data Tim Bannister.

Regional Boom

House prices outside London climbed further in July as buyers race for more space

Source: Rightmove House Price Index

Larger homes with four or more bedrooms saw a 39% surge in sales while the number of houses coming to market dropped by 15% compared with 2019, according to Rightmove. That fits with reports of a pandemic-induced “race for space” away from populated urban areas.

In a separate report, Deloitte said consumer confidence returned to pre-pandemic levels in the second quarter, fueling a surge in spending on non-essential items. Eight in 10 people saved money during lockdowns that closed stores and limited opportunities to spend, Deloittte’s survey of 3,000 consumers between June 18 and June 21 found.