You are here: Home - Mortgages - First Time Buyer - News -

House prices grow at fastest rate since November 2004

Written by:
House prices rose by 13.4 per cent in June, the fastest rate since November 2004.

The average home in the UK now costs £245,432, up from £216,403 in June 2020, according to the latest Nationwide House Price Index.

All parts of the UK saw house price increases during the three months to June.

Northern Ireland and Wales saw the largest gains, at 14% and 13.4% respectively, while Scotland saw the weakest rate of annual growth, at 7.1% closely followed by London at 7.3%.

Robert Gardner, chief economist at Nationwide, said house prices “are close to a record high relative to average incomes”, which makes it “even harder for prospective first-time buyers to raise a deposit”.

He said: “Underlying demand is likely to remain solid in the near term as the economy unlocks. Consumer confidence has rebounded while borrowing costs remain low. This, combined with a lack of supply on the market, suggests further upward pressure on prices. But as we look toward the end of the year, the outlook is harder to foresee.”

Gardner predicts activity to “inevitably soften” after the stamp duty holiday ends in September.

Buyers have not had to pay stamp duty on the first £500,000 of their purchase since last July. However, the scheme begins to wind down on 30 June and ends completely at the end of September.

Danni Hewson, a financial analyst at AJ Bell, said rising house prices in June was not a surprise as home buyers rushed to complete before the end of the stamp duty holiday.

She added “cheap interest rates and the availability of low deposit deals have undoubtedly fuelled price hikes”.

Nicky Stevenson, managing director at national estate agent group Fine & Country, said: “The housing market continues to see an unconstrained rally which may well be going into overdrive as the economy continues to unlock.

“Annual house price growth of this magnitude is something no one thought they’d see, particularly with the stamp duty holiday now tapering out.

“Despite that additional cost to buyers, this remains a relatively frenzied market and desirable properties are not staying on the shelf for very long.”

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.

Everything you wanted to know about ISAs…but were afraid to ask

The new tax year is less than a fortnight away and for ISA savers or investors, it’s hugely important. If yo...

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

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