17:21 PM, 7th September 2021, About 10 months ago
The latest Halifax House Price Index is reporting year-on-year inflation cooling slightly to 7.1% with monthly increases in August of 0.7% and the average house price in the UK now standing at £262,954.
Russell Galley, Managing Director, Halifax, said: “Average house prices climbed again in August, with the cost of a property increasing by 0.7% or £1,789. Back-to-back monthly price gains have now pushed the cost of a typical home to a record of £262,954, topping the previous high (£261,642) recorded in May this year.
“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% (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%).
“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 comes to an end later this month.
“Moreover, the macroeconomic environment is becoming increasingly positive, with job vacancies at a record high and consumer confidence returning to pre-pandemic levels. 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.”
Regions and nations house prices:
As would be expected given the trends at a UK level, annual house price inflation is slowing in most nations and regions. Wales remains the strongest performing area, with annual house price inflation at 11.6% and the only double-digit rise recorded in the UK during August.
The South West is also still experiencing strong growth at 9.6%, likely reflecting the ongoing demand for rural living within the region. Some areas do appear to have headroom for even stronger price growth, with annual house price inflation in the North East now up to 8%.
Northern Ireland has also seen prices rise further with annual house price inflation of 9.3% in August, though Scotland has seen price growth slow to 8.4%.
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. Though at a cost of £508,503, typical properties in the capital remain far above the national average national price.
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