You are here: Home - Mortgages - Buy To Let - News -

House prices continue to rise as Wales and Scotland lead the charge

0
Written by: Emma Lunn
07/10/2021
House prices grew at their fastest monthly pace since February 2007 following a 1.7% rise between August and September driving up the cost of the average home to £267,587.

According to Halifax, annual growth reached 7.4% reversing a three-month downward trend that saw yearly house price inflation fall from 9.6% in May to 8.7% in June, 7.6% in July and 7.2% in August.

Government figures on house price inflation recorded values growing at a much higher rate over the summer. In June, the Office of National Statistics recorded yearly growth at 13.2%.

Wales and Scotland continued to record the strongest house price inflation of any UK region or nation, recording annual growth of 11.5% and 8.3% respectively. The average house price in Wales reached £194,286 in September, with Scotland recording an average house price of £188,525.

Russell Galley, managing director at Halifax, said: “While the end of the stamp duty holiday in England and a desire among homebuyers to close deals at speed may have played some part in these figures, it’s important to remember that most mortgages agreed in September would not have completed before the tax break expired. This shows that multiple factors have played a significant role in house price developments during the pandemic.”

One factor, said Galley, was the change in homebuyers’ preferences and lifestyle choices. The popularity of larger homes has pushed up prices at faster pace than smaller properties.

The price of flats has risen 6.1%, or £6,640, in a year, while detached properties have risen 8.8% in value, costing a buyer an additional £41,000.

The rising pressures on the cost of living and threats of increasing taxes are expected to dampen demand in the coming months but the low cost of borrowing and improving labour prospects for those already in employment are expected to buoy the market.

Limited supply, said Galley, was the biggest factor underpinning the future of house prices. Estate agents have reported a continuing reduction in the number of houses for sale. The shortage is expected to underpin average prices, rather than the recent rate of price growth, into next year.

Andrew Wishart, property economist for Capital Economics, said: “Most mortgages approved in September will have been for purchases that will complete in October or November, so rather than a last-minute rush to secure stamp duty savings, the strength of the data suggests that we are right to expect that house prices will continue to rise after the tax break ends.”

On comparing the Halifax index with Nationwide’s report Wishart noted that while the building society’s measure showed only a small increase in prices in September, when analysing quarterly price growth, both indices show growth easing which he said could be attributed to the end of the stamp duty holiday.

“Nonetheless, the strong gain in the Halifax index in September suggests that we are right to expect house price growth to cool rather than collapse,” said Wishart. “Indeed, very limited [stock] suggests that strong competition between buyers for the limited number of homes for sale will support prices in Q4.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week