Average UK house prices reached a record high in August, says Halifax
Average UK house prices last month increased to a record high, even with the full stamp duty holiday no longer in place to entice buyers.
Lender Halifax said average UK house prices in August reached £262,954, up 0.7% from the prior month, and higher than the £245,602 recorded in the same month in 2020. The previous high was £261,642 in May.
Russell Galley, managing director of Halifax, said: “August’s rise was relatively modest and the annual rate of house price inflation continued to slow, hitting a five-month low of 7.1% (versus 7.6% in July). However, compared to June 2020, when the housing market began to reopen from the first lockdown, prices remain more than £23,600 higher (or +9.9%).”
The latest increase came even as incentives for buyers got less generous. The residential market was boosted last year by the government allowing the first £500,000 spent on a property to be tax free.
The tax break was scaled back from July 2021, and the threshold for the stamp duty holiday is £250,000 until September 30.
Halifax’s Galley said: “We believe structural factors have driven record levels of buyer activity – such as the demand for more space amid greater home working. These trends look set to persist and the price gains made since the start of the pandemic are unlikely to be reversed once the remaining tax break comes to an end later this month.”
He also pointed out the macroeconomic environment is becoming increasingly positive, “with job vacancies at a record high and consumer confidence returning to pre-pandemic levels”.
Galley said: “Coupled with a supply of properties for sale that looks increasingly tight, and barring any reimposition of lockdown measures or a significant increase in unemployment as job support schemes are unwound later this year, these factors should continue to support prices in the near-term.”
The lender’s data shows Greater London continues to lag the rest of the country, registering just a 1.3% annual increase in prices in August and, over the latest rolling three-monthly period, was the only region or nation to record a fall in prices (-0.3%).
The year-over-year rise in London was also the weakest seen in 18 months.
However, at £508,503, typical properties in the capital are still much higher than other parts of the UK. Meanwhile, London-focused housebuilders such as Berkeley have recently pointed to encouraging performances.
Nick Barnes, head of research at estate agency chain Chestertons, said: “We expect activity to pick up this month as there is still substantial unsatisfied demand for spacious homes, mortgage offerings remain attractive and buyers are keen to get their lives back on track post-lockdown.”