House prices go through the roof
Official statistics show property values in the UK hit a record high in September, writes Vicky Shaw
The average UK house price reached a record high of £245,000 in September, after jumping by 4.7 per cent compared with the same time of year in 2019, official figures show.
It meant that property values were £11,000 higher on average in September than a year earlier, according to the Office for National Statistics (ONS).
The typical London house price also hit a record high of £496,000 in September, the ONS index showed.
Average house prices increased over the year in England to £262,000 (4.9 per cent), in Wales to £171,000 (3.8 per cent), in Scotland to £162,000 (4.3 per cent), and in Northern Ireland to £143,000 (2.4 per cent).
The rise in values followed a stamp duty holiday on property sales in England and Northern Ireland introduced by Chancellor Rishi Sunak in July. Similar cuts were made on the property sales taxes in Scotland and Wales.
The ONS index is based on completed transactions. As a house sale typically takes six to eight weeks to complete, the price data feeding into its September index has started to reflect these tax changes.
The report stated: “The tax holiday is due to end on March 31, 2021 across the whole of the UK. This may allow sellers to request higher prices as buyers’ overall costs are reduced.”
The ONS said that the recent price increases may reflect a range of factors – including pent-up demand, some possible changes in housing preferences since the coronavirus pandemic, as well as a response to the changes made to property transaction taxes across the nations.
There are also signs that demand for bigger homes has grown. The average price of detached properties increased by 6.2 per cent in the year to September, in comparison to flats and maisonettes increasing by 2 per cent over the same period.
Over the past four years, there has been a general slowdown in UK house price growth, driven mainly by a slowdown in the south and east of England.
But the ONS said that the start of 2020 had already seen a pickup in annual growth in the housing market – before the coronavirus restrictions were put in place at the end of March.
Looking within England, the report said that the South West was the English region with the highest annual house price growth, with average prices increasing by 6.4 per cent to £275,000 in the year to September.
The lowest annual growth was in the North East, where average prices increased by 3.3 per cent over the year to September.
The North East of England continues to have the lowest average house price at £136,000.
In contrast to the record house prices hit in London, the North East is the only English region yet to surpass its pre-economic downturn peak of July 2007.
Mark Manning, managing director of estate agent Manning Stainton, said: “September was an exceptional month, with sales and asking prices massively up on the same period last year.
“We usually see activity begin to slow slightly in September, but pent-up demand from the summer lockdown has resulted in record activity levels.”
Anna Clare Harper, chief executive of asset manager SPI Capital, said: “The fundamental drivers of housing demand are strong and we are in an environment of low interest rates, with reduced rates of new buildings coming onto the market and limited existing stock.”
Jeremy Leaf, estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said the report “underlines what we were seeing at the tail end of the aftermath of the first lockdown mini-boom”.
The fundamental drivers of housing demand are strong and we are in an environment of low interest rates