Era of record house prices is here to stay

Amid 7% rise as tax holiday ends, experts say...

HOUSE prices hit yet another record high in August despite the tapering off of the pandemic stamp duty cut.

The average property now costs £262,954 – up 0.7 per cent on July and 7.1 per cent on August last year, according to the Halifax House Price Index.

And while the reduction in the stamp duty tax relief – brought in to boost the market after the first lockdown – caused the number of sales to drop in July, and the rate of price growth to slow in August, experts expect record levels are here to stay.

Halifax managing director Russell galley said: ‘Much of the impact from the stamp duty holiday has now left the market.

‘However, while such government schemes have provided vital stimulus, there have also been other significant drivers of house price inflation. 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.’

The tapering of stamp duty relief caused a flood of house purchases to be completed in June – HMRC figures showed the number completed in July fell to 73,740 from 198,420 the previous month. And prices in August climbed 7.1 per cent year-on-year, slightly down from the 7.6 per cent rise in July.

But compared to June 2020, when the market began to reopen following the first lockdown, prices remain more than £23,600 higher, up 9.9 per cent.

Mike Scott, of estate agency Yopa, said: ‘The market is still being driven by a severe shortage of homes for sale, post-pandemic lifestyle changes and the savings many people have made over the past 18 months.’

growth in August was strongest in Wales, where the average home costs £192,928 – up 11.6 per cent on a year ago. greater

london, however, has lagged. Average prices in the capital have climbed just 1.3 per cent in the past year, to £508,503.

But lucy Pendleton, of independent estate agents James Pendleton, said: ‘Demand is strengthening once more in london.’ She added: ‘It’s back to the office time, buyers are rediscovering the capital and why it’s great to live there.’