UK house prices are falling for the first time since January as the stamp tax cut wears off – as happens to businesses

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House prices in the UK were down 0.5% in June from May, the first monthly decline since January, according to Halifax, one of the UK’s largest mortgage lenders. The annual growth rate has fallen from 9.6% in May to 8.8% from its 14-year high as the stamp tax now expires through September.

The tax cut was introduced by Chancellor Rishi Sunak in June last year to revive the housing market, which practically closed in the first few months of the pandemic.

The average price of a property was £ 26,358 in June. Average prices are still more than £ 21,000 higher than at that time last year after almost a year of strong growth.

Russell Galley, General Manager at Halifax, says:

With the stamp tax now expiring, it has been predicted that the market could lose some momentum in the second half of the year and those with mortgages approved in the early summer months are unlikely to benefit from the maximum tax break, given the break Time it takes to complete transactions.

However, with the tapered approach, those buying at the current average price of £ 260,358 would still only be paying around £ 500 stamp duty at today’s rates, which will increase to around £ 3,000 when things return to normal from early October.

Buyers have been looking for single-family homes in particular as many people are moving from home to the smaller towns and rural areas during the pandemic. Galley says:

Government subsidies last year helped fuel demand, especially among buyers looking for larger single-family homes at the higher end of the market. In fact, the average price of a single family home has grown faster than any other property type over the past 12 months, by more than 10% or nearly £ 47,000 in cash. At over a half a million pounds, they’re now £ 200,000 more than the typical semi-detached house.

in the Germany, industrial production According to the Federal Statistical Office (Destatis), there was an unexpected fall of 0.3% in May compared to the previous month. Production rose 17.3% compared to last May when large swaths of industry cut production due to the coronavirus pandemic.

Compared to February 2020, the month before the Covid-19 restrictions were in place, production in May was 5% lower.

Carsten Brzeski, Global Head of Macro at ING, says:

The disappointing and sluggish industrial production in the first two months of the second quarter suggests that supply chain disruptions, such as the blockage of the Suez Canal in April or the ongoing supply problems with semiconductors, have not left German industry unscathed.

However, the general direction of industrial production is still pointing upwards … The upswing will come, it simply does not follow the German principle of “punctuality”.

Investors are excited about the markets Minutes from the last Federal Reserve meeting, which will be released tonight, which could show a shift towards policy tightening. Asian stock markets fell, also under pressure from Chinese crackdown on technology companies. The Japanese Nikkei lost 1.1% and the Hong Kong Hang Seng fell 0.89% to almost a six-month low, while the Australian market rose 0.9%.

European stock futures indicate a slightly higher opening here.

Minutes of the June Fed meeting will be scrutinized for signs of how serious members were in scaling back the huge asset purchase program and when the first rate hike might come.

The agenda

• 7.45 a.m. BST: France trading for May
• 9 a.m. BST: retail sales in Italy for May
• 12 noon BST: US MBA mortgage applications for the week of July 2nd
• 7:00 p.m. BST: U.S. Open Market Committee (FOMC) minutes