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03 September 2021

UK House Prices Continue to Rise

UK house prices continued to rise in August despite the effects of the stamp duty holiday being reduced.

According to Nationwide, property prices witnessed the second largest monthly growth in 15 years with an increase of 2.1%. House prices have escalated since the beginning of the pandemic, with the average value now 13% higher than March 2020.

Owing to the sharp increase since then, the building society said that the average UK house is now worth £248,857. Commenting on the news in a statement, Nationwide said that the trend seen in August was “surprising” given that stamp duty holidays are now changing.

At the end of June, stamp duty holidays became less generous in some parts of the UK with thousands of deals being completed in a short space of time to beat the deadline. Tax breaks around this time led to significant movement at the higher end of the housing market.

While the average price of homes in the UK has risen 13% since the start of the pandemic, the average asking price of a flat is up by just over 1% over the same period, according to property portal Rightmove. The firm suggested that buyers were more interested in spacious homes with garden areas rather than flats and apartments.

Describing the housing market’s picture for August, Nationwide Chief Economist Robert Gardner, said in a statement: “Annual house price growth increased to 11% in August, from 10.5% in July. Prices rose 2.1% in month-on-month terms, after taking account of seasonal effects.”

He continued: “The bounce back in August is surprising because it seemed more likely that the tapering of stamp duty relief in England at the end of June would take some of the heat out of the market. Moreover, the monthly price increase was substantial. At 2.1% it was the second largest monthly gain in 15 years (after the 2.3% monthly rise recorded in April this year).

“The strength may reflect strong demand from those buying a property priced between £125,000 and £250,000 who are looking to take advantage of the stamp duty relief in place until the end of September, though the maximum savings are substantially lower (£2,500 compared to a maximum saving of £15,000 on a property valued at £500,000 before the stamp duty relief in England tapered),” he continued.

“Lack of supply is also likely to be a key factor behind August’s price increase, with estate agents reporting low numbers of properties on their books,” he added.

Rightmove has witnessed a number of housing market trends witnessed throughout the pandemic. In August, the firm published data suggesting that the average number of properties on an agent’s books is currently 16, down from 29 in July 2020.
UK House Prices Continue to Rise
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