Data from the latest edition of the UK’s longest-running monthly house price series shows that the average cost of a home in the UK is now more expensive than ever before.
Figures from August 2021’s Halifax House Price Index reveal that the average cost of a UK home is now £262,954, making for a 7.1% increase from this time last year.
However, despite the modest 7.1% increase, some regions are experiencing an even higher price hike, with Wales, in particular, showcasing an 11.6% rise in prices compared to 2020.
Commenting on this month’s update, Russell Galley, Managing Director, Halifax, said: “Average house prices climbed again in August, with the cost of a property increasing by 0.7% or £1,789. Back-to-back monthly price gains have now pushed the cost of a typical home to a record of £262,954, topping the previous high (£261,642) recorded in May this year.
“Given the rapid gains seen over the past 12 months, August’s rise was relatively modest, and the annual rate of house price inflation continued to slow, hitting a five-month low of 7.1% (versus 7.6% in July). However, compared to June 2020, when the housing market began to reopen from the first lockdown, prices remain more than £23,600 higher (or +9.9%).
“Much of the impact from the stamp duty holiday has now left the market, as highlighted by the drop in industry transaction numbers compared to a year ago. However, while such Government schemes have provided vital stimulus, there have also been other significant drivers of house price inflation. “
Russell adds: “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.
“Moreover, the macroeconomic environment is becoming increasingly positive, with job vacancies at a record high and consumer confidence returning to pre-pandemic levels. Coupled with a supply of properties for sale that looks increasingly tight, and barring any re-imposition of lockdown measures or a significant increase in unemployment as job support schemes are unwound later this year, these factors should continue to support prices in the near-term.”
However, despite the rise in prices, the HMRC monthly property transactions data for UK home sales reveals that the number of sales has actually decreased by 62.8%.
Data from the HMRC (which is typically a month behind that of the Halifax House Price Index) showed that there were 73,740 transactions in July 2021, down by 62.8% from June’s figure of 198,420