House prices reach record highs, but can the ‘mini-boom’ be maintained?

House prices have risen to their highest levels on record, with pent-up demand following lockdown and the Chancellor’s stamp duty holiday causing a mini-boom on the market in July. 

Average house prices grew 1.6pc from the month before, according to Halifax’s price index, up to fresh highs of £241,604 – a jump of almost £4,000. 

It reverses the dip in prices seen from February to June, as social distancing measures followed by a market lockdown prevented viewings and transactions.

House prices in July were 3.8pc higher than the same time last year, but concerns remain of a downturn to come. 

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what it means for your house purchase

As lenders have withdrawn low deposit mortgages amid the economic chaos unleashed by the pandemic, Help to Buy has become even more vital in the battle to get on the housing ladder.

Buyers need a 5pc deposit to take part in the scheme, with the Government offering a loan worth 20pc of the purchase price, which is interest-free for five years. The remaining 75pc is obtained from a traditional mortgage lender.

However, the scheme has been accused of pushing up house prices and boosting builders’ profits, rather than helping ordinary buyers.

What is happening to Help to Buy?

Help to

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Stamp duty holiday helps house prices rebound 1.7pc in July

House prices have rebounded this month following the Chancellor’s stamp duty holiday announcement but analysts have called the boost a “false dawn” and warned of steep falls later in the year.

Prices are up 1.5pc for the year, growing 1.7pc since June, when prices were down 1.6pc, according to figures from the building society Nationwide. 

The cost of an average home now stands at £220,936, up from £216,403 in June.

Experts have said the resurgence was driven by Rishi Sunak’s stamp duty holiday, which exempts property transactions of up to £500,000 from the charge until the end of March 2021,

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Our obsession with house price growth is self-destructive

The Government’s review of capital gains tax has made many people very uneasy. It could be feasible that we all end up paying tax on the gains we made when selling our homes. We naturally hate the idea of that – it has always been a right to make profit on our assets. But the, fact is, the housing market would work better if we did not want to profit at all.

I am perhaps about to talk myself out of a job, but our obsession with house price growth is frankly bizarre. Why? Because when the gain is too

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