UK average house price hit record high in August
Average house prices headed higher again in August, with the cost of a property increasing by 0.7% or £1,789 ($2,477).
According to the latest Halifax House Price Index, 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 of £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% — compared to 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, up 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," said Halifax managing director Russell Galley.
"However, while such government schemes have provided vital stimulus, there have also been other significant drivers of house price inflation."
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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 behind the rest of the country, registering just a 1.3% annual increase in prices in August. Over the latest rolling three-monthly period, it was the only region or nation to record a fall in prices, of 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 price.
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"Government interference always results in artificial and distorted markets, which is exactly what we're dealing with now. The stamp duty holiday was unnecessary given the amount of time people had been locked away for," said Lewis Shaw, founder of Mansfield-based Shaw Financial Services.
"Also, due to COVID, people's requirements for property have changed and that was enough of a driver of transactions in itself. With demand for homes so robust and supply on the ropes, it's hard to see prices falling.
"While there may be an increase in unemployment when the furlough scheme ends, the chronic shortage of labour caused by Brexit in some sectors could offset this."
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