Monday, 29 November 2021

‘Race for space’ fuels rise in prices

‘Race for space’ fuels rise in prices

UK house prices rose by 1.7 per cent in September, adding more than £4,400 to the value of the average property.

According to the Halifax bank, the average UK house price now stands at a record £267,587.

Halifax managing director Russell Galley said: “This rate of monthly growth was the strongest since February 2007, pushing year-on-year house price inflation up to 7.4 per cent.

“This also reversed the recent three-month downward trend in annual growth, which had peaked at an annual rate of 9.6 per cent in May.

“While the end of the stamp duty holiday in England — and a desire amongst homebuyers to close deals at speed — may have played some part in these figures, it is important to remember that most mortgages agreed in September would not have completed before the tax break expired.

“This shows that multiple factors have played a significant role in house price developments during the pandemic.

“The ‘race for space’ as people changed their preferences and lifestyle choices undoubtedly had a major impact. Looking at price changes over the past year, prices for flats are up just 6.1 per cent, compared to 8.9 per cent for semi-detached properties and 8.8 per cent for detached.

“This translates into cash increases for detached properties of nearly £41,000 compared to just £6,640 for flats.

“Against a backdrop of rising pressures on the cost of living and impending increases in taxes, demand might be expected to soften in the months ahead, with some industry measures already indicating lower levels of buyer activity.

“Nevertheless, low borrowing costs and improving labour market prospects for those already in employment are likely to continue to provide support.

“Perhaps the biggest factor in determining the future of house prices remains the limited supply of available properties.

“With estate agents reporting a further reduction in the number of houses for sale, this is likely to underpin average prices — though not the recent rate of price growth — into next year.”

For more information, visit www.halifax.co.uk

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