The average house price in the UK is nearing £250,000 as the growth in prices shows no sign of abating, even as the end of the Chancellor’s stamp duty initiative is winding down.
The annual price growth in August rose to 11 per cent compared with 10.5 per cent in July, with prices rising by 2.1 per cent month-on-month. That made it the second largest gain in 15 years, according to the latest Nationwide House Price Index.
The average house price has now increased by 13 per cent since the start of the pandemic in early 2020.
In the UK it now stands at £248,857, more than £4,000 up on the July figure of £244,229.
The survey suggests that the strong demand could be fuelled by those looking to buy at the £125,000 to £250,000 price range, where they are still able to take advantage of stamp duty relief in England and Northern Ireland until the end of September.
Another factor in the rise could be the lack of housing stock, which is being reported by estate agents.
The report also suggested that with the rebound in consumer confidence since the economy opened up again and the resilience of the labour market, people are prepared to push ahead, encouraged further by record low borrowing costs.
Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said: “Annual house price growth slowed to 10.5 per cent in July, from the 17-year high of 13.4 per cent recorded the previous month. In month-on-month terms, house prices fell by 0.5 per cent, after taking account of seasonal effects, following a 0.7 per cent rise in June.
“The modest fallback in July was unsurprising given the significant gains recorded in recent months. Indeed, house prices increased by an average of 1.6 per cent a month over the April to June period – more than six times the average monthly gain recorded in the five years before the pandemic.
“The tapering of stamp duty relief is also likely to have taken some of the heat out of the market. This provided a strong incentive to complete house purchases before the end of June, especially for higher priced properties. For those purchasing a property above £250,000, the maximum stamp duty saving is reduced from £15,000 to £2,500 after the end of June.”
He added that in the short-term demand should remain strong, but is likely to slow once the stamp duty holiday expires at the end of September.
For help and advice with related residential property matters, please get in touch with our expert team today.