U.K. House Price Rally Stretches Affordability in Best Half Year

The U.K. housing market experienced its busiest ever first half of a year, pushing up the average asking price for property by more than 21,000 pounds ($29,000) in six months, according to Rightmove.

The property portal on Monday said asking prices for homes 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% amid a buying frenzy triggered by a temporary tax cut and rising consumer confidence.

A jump in activity revealed a shortfall of 225,000 homes, leaving prospective buyers with 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.

The surge came 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 for at least the rest of this year despite the phasing out of the stamp-duty holiday, Rightmove warned.

U.K. House Price Rally Stretches Affordability in Best Half Year

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.

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