House prices have hit a record high with the average UK property now at £262,954, according to the latest data from Halifax.
The mortgage lender’s monthly index revealed the pace of annual growth had slowed with prices increasing by 7.1% over the last year to August. This compared to 7.6% in July.
Yet with prices surging upwards over the month by 0.7% the market continued flourishing during the usually quiet summer month. The meant average prices topped the previous high of £261,642 recorded in May this year.
House prices in Wales soared by the highest rate, increasing 11.6% annually. This was the only double digit rise recorded in the UK in August. But the South West was not far behind, experiencing average house price inflation over the year of 9.6%.
In London, however, it was a very different story. The capital registered an annual increase of just 1.3% in August and over the latest rolling three-monthly period was the only region to record a fall in prices. Indeed, prices over this time dropped by 0.3%.
For anyone keen to cash in on this fall, the typical price is still well above the national average – at £508,503, affordability is still clearly a barrier.
Russell Galley, managing director of Halifax, said: “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% (versus 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 (or +9.9%).”
Race for space
It’s no longer the stamp duty holiday which is impacting prices, Galley explained. Indeed he – like many other industry experts – believe the demand for space driven by increased home working is fuelling record levels of buyer activity.
“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,” he said.
Rising employment options and increased consumer confidence were also providing a helping hand, Galley added.
Another consequence of the ‘race for space’ has been the rise in prices in more rural areas which, experts say, could explain the strong price increases in Wales and the South West of England.
Karen Noye, mortgage expert at Quilter said, “Regions such as the South West and Wales continue to post positive increases, likely a product of people looking for more rural settings after lockdown.
“Similarly, Greater London continues to lag behind the rest of country in terms of house prices with just a 1.3% annual increase in August perhaps reflecting a larger proportion of people choosing to work remotely and come into the office sporadically allowing them to unchain themselves from the capital.”
