UK average house prices increased by 4.7% over the year to September, up from 3.0% in August to stand at a record high of £245,000, according to the latest UK House Price Index from the ONS and the Land Registry.
Average house prices increased over the year by 4.9% in England, 3.8% in Wales, 4.3% in Scotland, and 2.4% in Northern Ireland.
The South West was the English region with the highest annual house price growth, with average prices increasing by 6.4% to £275,000 in the year to September, up from 3.2% in August.
The lowest annual growth was in the North East, where average prices increased by 3.3% over the year to September 2020.
London’s average house prices hit a record high of £496,000.
On a non-seasonally adjusted basis, average house prices in the UK increased by 1.7% between August and September 2020, compared with an increase of 0.1% in the same period a year ago.
On a seasonally adjusted basis, average prices increased by 1.8% over the month, following an increase of 1.1% in the previous month.
Paul Stockwell, chief commercial officer at Gatehouse Bank, commented: “As predicted, house price growth has intensified in September fuelled by pent-up demand coupled with significant cost-savings to buyers presented by the stamp duty holiday. I expect this trend will continue in the short term as buyers feel the urgency to secure property deals and allow time for completion before the tax break ends.
“What began as a disastrous year for the property industry has been turned on its head by government interventions, creating a surge of demand predominantly in England and Northern Ireland where the stamp duty reduction is greatest. This in itself has presented new challenges to the industry with property portal Zoopla estimating 418,000 sales in the pipeline nationally, 50 per cent more than the typical number for this time of year.
“Bank of England data has already indicated that mortgage approvals in September represented the highest levels of agreed borrowing since before the Global Financial Crisis more than a decade ago. But as pressure on the property industry resources grows, it will be interesting to see if the Government concedes to requests from the industry to extend the stamp duty holiday and alleviate the expected congestion in the new year.”
Anna Clare Harper, CEO of asset manager SPI Capital, added: “For many, September feels like the distant past, but this index remains interesting and useful, since it represents a more complete picture than comparable releases. A 4.7% increase in house prices, with mortgage approvals at their highest level since 2007, suggests a ‘mini boom’. Many feel this will be short lived, given economic circumstances and forecasts.
“However, 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.
“Ultimately, increasing house prices are being driven by a combination of new priorities and new policy. Notably, many existing homeowners were spurred on to move by the combination of needing more space and the temporary Stamp Duty changes. As a result, and perhaps unsurprisingly, the increase in house prices was led by detached and semi-detached properties.
“It is interesting to note that new-build properties lagged behind existing properties, falling by 1.9%, despite the influence of the Help to Buy scheme.
“Returning to fundamentals – for investors and homebuyers alike, the important thing to remember is that capital growth is a great bonus, but shouldn’t be relied on just because lending is cheap.”
Original Article from Financial Reporter 18/11/2020