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South West and Wales top house price inflation hotspots

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Rising migration out to Wales and the South West are driving a longer-term trend to relocate to the countryside, post-lockdown, as price rises in London lag behind the rest of the country, according to data.

The Halifax house price index showed Wales remains the strongest performing area, with annual house price inflation at 11.6 per cent, the only double-digit rise recorded in the UK in August. The South West is also still experiencing strong growth at 9.6 per cent, likely reflecting the ongoing demand for rural living within the region.

As the tapered stamp duty holiday finishes this September, the August data showed a monthly price rise of +0.7 per cent, equating to annual growth of +7.1 per cent.

Russell Galley, managing director, Halifax, said: “We believe structural factors have driven record levels of buyer activity – such as the demand for more space amid greater home working. 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.”

Some areas have potential for further annual price rises with inflation in the North east now up to eight per cent and Northern Ireland rising to 9.3 per cent in August, where Scotland saw price growth slow to 8.4 per cent.

Karen Noye, mortgage expert at Quilter, said: “Greater London continues to lag behind the rest of country in terms of house prices with just a 1.3 per cent 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.”

Noye added that job vacancies remain plentiful, despite furlough ending, making it unlikely we are going to see huge levels of unemployment or a negative impact on the housing market.

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