Saturday, 18 September 2021
THE UK’s average house price has dipped for the first time since January in response to the tapering of the stamp duty holiday.
According to the Halifax, the average UK property price is now £260,358.
Halifax managing director Russell Galley said: “The average UK house price slipped by -0.5 per cent in June, the first monthly fall since January.
“As a result, annual house price inflation also eased back slightly from May’s 14-year high of 9.6 per cent to stand at 8.8 per cent in June.
“It is important to put such a moderate decrease in context, with average prices still more than £21,000 higher than this time last year following a broadly unprecedented period of gains.
“With the stamp duty holiday now being phased out, it was predicted the market might start to lose some steam entering the latter half of the year, and it’s unlikely that those with mortgages approved in the early months of summer expected to benefit from the maximum tax break, given the time needed to complete transactions.
“That said, with the tapered approach, those purchasing at the current average price of £260,358 would still only pay about £500 in stamp duty at today’s rates, increasing to around £3,000 when things return to normal from the start of October.
“Government support measures over the last year have helped to boost demand, particularly among buyers searching for larger family homes at the upper end of the market.
“Indeed, the average price of a detached home has risen faster than any other property type over the past 12 months, up by more than 10 per cent or almost £47,000 in cash terms.
“At a cost of over half a million pounds, they are now £200,000 more expensive than the typical semi-detached house. That power of home-movers to drive the market, as people look to find properties with more space, spurred on by increased time spent at home during the pandemic, won’t fade entirely as the economy recovers.
“Coupled with buyers chasing the relatively small number of available properties, and continued low borrowing rates, it’s a trend which can sustain high average prices for some time to come.
“However, we would still expect annual growth to have slowed somewhat more by the end of the year, with unemployment expected to edge higher as job support measures unwind and the peak of buyer demand now likely to have passed.”
Looking at the UK as a whole, Scotland and Northern Ireland are among the areas witnessing the strongest growth in property prices.
While the two Midlands regions and Greater London saw slightly slower annual price gains compared to May, all the other regions and nations saw a strengthening of price inflation.
Wales (12 per cent) continues to lead the way on annual house price growth, registering its strongest performance since April 2005, while Northern Ireland (11.5 per cent), the North West (11.5 per cent), Yorkshire and Humberside (10.9 per cent) and Scotland (10.4 per cent) all registered double-digit gains.
Mr Galley added: “For Northern Ireland and Scotland, the annual price rises were the highest recorded since late 2007, while for the North West and Yorkshire, house price inflation was the strongest since early 2005.
“At the other end of the scale, the South of England continues to lag somewhat behind the rest of the country, with Eastern England and the South East recording inflation rates of around seven per cent.
“However, once again it is Greater London that is somewhat of an outlier, with house price inflation just 2.9 per cent year on year. Though as we’ve noted previously, there are several unique factors likely to be weighing on the capital’s property market.”
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