Figures from June 2021’s Halifax House Price Index show prices have dropped from May yet remain considerably higher than 2020.
Figures from the UK’s longest-running monthly house price series have shown that the UK’s average house price has fallen for the first time since January.
According to the data found within the June 2021 edition of Halifax’s House Price Index, the average UK home is now £260,358, showcasing a slight -0.5% change compared to the previous month.
However, despite the somewhat rare monthly reduction in prices, there is little evidence to suggest that the UK property market is showing any signs of becoming more affordable. On the contrary, house prices in the country remain 8.8% higher than this time last year.
Giving an analysis of the report, Halifax’s Managing Director, Russell Galley, said: “The average UK house price slipped by -0.5% in June, the first monthly fall since January. As a result, annual house price inflation also eased back slightly from May’s 14-year high of +9.6% to stand at +8.8% in June.
“[However] it is important to put such a moderate decrease in context, with average prices still more than £21,000 higher than this time last year, following a broadly unprecedented period of gains.
“With the stamp duty holiday now being phased out, it was predicted the market might start to lose some steam entering the latter half of the year, and it’s unlikely that those with mortgages approved in the early months of summer expected to benefit from the maximum tax break, given the time needed to complete transactions.
“That said, with the tapered approach, those purchasing at the current average price of £260,358 would still only pay about £500 in stamp duty at today’s rates, increasing to around £3,000 when things return to normal from the start of October.
“Government support measures over the last year have helped to boost demand, particularly amongst buyers searching for larger family homes at the upper end of the market. Indeed, the average price of a detached home has risen faster than any other property type over the past 12 months, up by more than 10% or almost £47,000 in cash terms. At a cost of over half a million pounds, they are now £200,000 more expensive than the typical semi-detached house.
“That power of home movers to drive the market, as people look to find properties with more space, spurred on by increased time spent at home during the pandemic, won’t fade entirely as the economy recovers. Coupled with buyers chasing the relatively small number of available properties, and continued low borrowing rates, it’s a trend which can sustain high average prices for some time to come.
“However, we would still expect annual growth to have slowed somewhat more by the end of the year, with unemployment expected to edge higher as job support measures unwind, and the peak of buyer demand now likely to have passed.”
While the two Midlands regions and Greater London saw slightly slower annual price gains compared to May, all the other regions and nations of the UK saw a strengthening of inflation.
Wales showed a 12.0% annual house price growth, registering its strongest performance since April 2005.
For Northern Ireland and Scotland, the annual price rises were the highest recorded since late 2007, while for the North West and Yorkshire, inflation was the strongest since early 2005.
As touched on above, the South of England continues to lag somewhat behind the rest of the country. According to Halifax’s findings, Eastern England and the South East recorded inflation rates of around 7%, a far cry from the double digits displayed elsewhere in the UK.
Greater London is once again an outlier, with house price inflation a mere 2.9% year-on-year. However, prices in Greater London are considerably higher than in other regions and indeed nations of the UK. As such, the smaller rise in price will still reflect a higher average house price than the national figure of £260,358.