House prices rise £23.6k in a year to record high

Martin Roberts discusses the rise in house prices

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Property values across the country were up by 0.7 percent month on month – or £1,789 on average – in August, following a 0.4 percent increase in July. Russell Galley, managing director of Halifax, said: “Given the rapid gains seen over the past 12 months, 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 percent (versus 7.6 percent in July). “However, compared with June 2020, when the housing market began to reopen from the first lockdown, prices remain more than £23,600 higher (or 9.9 percent).”

Wales remained the strongest performing area, with annual house price inflation at 11.6 percent and the only double-digit rise recorded across the UK during August.

The South West was also still experiencing strong growth at 9.6 percent, probably reflecting the ongoing demand for rural living within the region, the report said.

Some areas appear to have headroom for even stronger price growth, Halifax added, with annual house price inflation in the North East of England at eight percent.

In Northern Ireland, annual house price inflation was at 9.3 percent in August.

Mr Galley said: “Much of the impact from the stamp duty holiday has now left the market, as highlighted by the drop in industry transaction numbers compared to a year ago. However, while such government schemes have provided vital stimulus, there have also been other significant drivers of house price inflation.

“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 in England and Northern Ireland comes to an end later this month.”

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors, said: “These prices are as much to do with stock shortages and cheap mortgage finance as activity.”

He added: “Market strength has not run its course and we are finding pent-up demand is alive and well, resulting in plenty of transactions, albeit at a lower level than a few months ago.”

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