The Daily Telegraph

House prices add £39,000 in year to rise at fastest rate since 2003

- By Alexa Phillips

HOUSE prices rose by 15.5pc in the past year, as values increased at the fastest rate for almost 20 years.

The average cost of a home in the UK was £292,000 in July, £39,000 more than a year ago, according to the Office for National Statistics. This is the biggest annual percentage rise since

May 2003. The statistics agency said the increase was so high because house prices fell last July after the stamp duty holiday ended. Buyers had rushed to complete their purchases in June 2021 to take advantage of the tax relief.

The biggest price rise in the last year was in Wales, where properties sold for 17.6pc more than the previous year. The average price was £220,000. House prices in England were up 16.4pc, to £312,000, while in Scotland they rose by 9.9pc, reaching £193,000.

The lowest increase was in Northern Ireland, where homes are worth 9.6pc more than last year. The average property is priced at £169,000. On a regional basis, London lagged behind other areas with house prices rising by 9.2pc.

Lawrence Bowles, of estate agent Savills, said he expected price growth to slow soon as many buyers were rushing to complete transactio­ns in order to secure lower mortgage rates. The Bank of England is expected to increase interest rates further next week.

“We may see interest rates peak after the next rise and start to come down again,” Mr Bowles said.

Gabriella Dickens, of Pantheon Macroecono­mics, said: “The sharp jump in the year-over-year growth rate in house prices does not necessaril­y mean the housing market is weathering the storm of surging mortgage rates.”

She said “near-term momentum will not be sustained”, adding that the official data refer to transactio­ns that were completed in July, which would have been agreed a few months earlier, before mortgage rates started to rise significan­tly.

Ms Dickens said: “Looking ahead, we expect house prices to fall outright in the second half of the year, given the size of the rise in mortgage rates.”

She said the increased desire for more space to work from home and fears over cladding issues in tower blocks had influenced prices.

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