Average house price rockets to £231,000

Average house price rockets to £231,000 - see league table of biggest increases

The average UK house price hit a record high of £230,700 in June, rising 7.3% in just seven months, latest figures show.

In December 2020, the average UK house price was £177,300.

Property values were 5.4% higher than a year earlier, Zoopla said, as demand continues to rocket despite the reintroduction of stamp duty on thousands of house purchases.

Stock shortages are helping to push up prices, with a 25% fall in the volume of homes for sale in the first half of the year compared to the same period in 2020, the property website said.

Looking at different property types, the search for space has pushed up the average price of a house by 7.3% over the past year.

By contrast, demand for flats has failed to keep pace and, as a result, prices growth is lagging at 1.4%, Zoopla added.

Grainne Gilmore, head of research at Zoopla, said: "Demand for houses is twice as high as typically seen at this time of year between 2017 and 2019, accelerating away from demand for flats, creating a disparity in average price growth across the two property types.

"House prices are being supported in part by a severe shortage of homes for sale, with stock levels down some 25% in the first half of the year compared to 2020."

The firm said that while house prices were surging, the growth in flat prices was lagging at 1.4% over the past year.

"The rise in demand for houses is something we saw in the first lockdown.

"It's a reassessment among many homeowners of where they want to live."

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Gilmore said that with the rise of working from home, many people wanted a spare room that could become an office, while others were seeking garden space.

"A cohort of buyers has eroded the supply of family houses and put upward pressure on house prices more than flats over the past 12 months," she said.

"That's a situation that we would expect to continue into 2022."

"We're still seeing very high levels of demand in the market, even now with more modest stamp duty savings," Gilmore added.

In June alone, house prices were up 5.4% year-on-year, although buyer demand dipped 9% in early July because of the stamp duty holiday coming to an end.

Sales agreed this year are still 22% ahead of average levels in 2020.

Where are house prices rising the most?

Demand dipped 9% in July, but Zoopla says the market is still trending well ahead of previous years (Demand dipped 9% in July, but Zoopla says the market is still trending well ahead of previous years)

As people are taking the opportunity to move out of big cities, house prices have grown the most in Wales at 10.2% and the North East at 8.8%, according to Zoopla.

House price growth is weakest in London at 5.6%.

For flats, prices have risen the most in Scotland at 5.2% and the Midlands at 3.7%, but in London, flat prices have fallen by 0.5%.

Zoopla said it was also seeing a jump in demand for properties in outer London, up 86% on 2017-19 levels.

But the housing website said that it expected sales in London to improve, "providing there are no further pandemic setbacks", since the rental market had already bounced back.

"Further relaxation on the restrictions around global travel will result in a firmer pick-up in demand, which will also reverse the downward trend in pricing," Zoopla said.