Estate agents see house price 'mini-boom' as temporary stamp duty holiday kicks in

The stamp duty holiday has caused a "mini-boom" in house prices, estate agents claimed as they urged the Government to consider making the changes permanent.

Since the changes came into force on July 8, the number of offers accepted on properties has jumped.

Knight Frank found that, for properties valued under £1.5 million, the number of deals closed were 146 per cent above the five-year average. Meanwhile, the number of new prospective buyers registering to purchase properties under £1.5 million was 100 per cent higher.

Last month, Rishi Sunak, the Chancellor, announced that stamp duty would be suspended in England and Northern Ireland on purchases of up to £500,000 until March next year.

The freeze has provided an "additional boost" to the housing market, Knight Frank said, adding: "The holiday, it must be concluded, is working."

However, it warned that job cuts and concerns of redundancies creating an immobile labour force "could prove counterproductive" to the market and said whether the change should be made permanent is "something the Government should consider".

It comes as house prices leapt to a new high in July in a "surprising spike" after the market was put on pause by the virus earlier this year.

Property values jumped by 1.6 per cent from a month earlier, according to the Halifax. Across the UK, the average property value was £241,604 in July, up from £237,834 in June.

Russell Galley, the managing director at Halifax, said: "The latest data adds to the emerging view that the market is experiencing a surprising spike post-lockdown. As pent-up demand from the period of lockdown is released into a largely open housing market, a low supply of available homes is helping to exert upwards pressure on house prices.

"Supported by the Government's initiative of a significant cut in stamp duty, and evidence from households and agents suggesting that confidence is currently growing, the immediate future for the housing market looks brighter than many might have expected three months ago."

Miles Robinson, the head of mortgages at online broker Trussle, said "time will tell" whether the recovery is a long-term trend or a "mini-boom".

"We're living in a time where many people's finances have been impacted and household finances are stretched, so any growth we're seeing now could well be short-lived," he said. "It's important to consider that rising house prices may be positive for the market, but some groups of home buyers will not necessarily see this as good news.”