Figures from the October edition of the Halifax House Price Index reveal that the average UK house price now exceeds a quarter of a million pounds.
As covered last month, the property market is currently undergoing a significant resurgence thanks in no small part to the revised Stamp Duty rates.
According to the data in Halifax’s most recent report, the average UK house price is now £250,457 – marking a 7.5% annual change from the previous October and the highest annual growth since June 2016.
Commenting on the results, Halifax’s Managing Director, Russell Galley, said: “The average UK house price now tops a quarter of a million pounds (£250,547) for the first time in history, as annual house price inflation rose to 7.5% in October, its highest rate since mid-2016.
Underlying the pace of recent price growth in the market is the 5.3% gain over the past four months, the strongest since 2006. However, month-on-month price growth slowed considerably, down to just 0.3% compared to 1.5% in September.”
As shown in the graphic above, October’s results saw a +4% quarterly increase, while the month-to-month increase was just 0.3% compared to September’s results.
The month of September saw the fifth consecutive monthly rise in-home spales, totalling at 98,010 – which was up by 21.3% from August.
In addition to home sales, the month of September also saw mortgage approvals rise to their highest in 13 years. According to figures produced by the Bank of England, there were 91,454 mortgage approvals in September, making for an annual change of +39%.
Russel added: “Overall we saw a broad continuation of recent trends with the market still predominantly being driven by home-mover demand for larger houses since March flat prices are up by 2.0% compared to a 6.0% increase for a typical detached property. In cash terms that equates to a £2,883 increase for flats compared to a £27,371 rise for detached houses.
“This level of price inflation is underpinned by unusually high levels of demand, with latest industry figures showing home-buyer mortgage approvals at their highest level since 2007, as transaction levels continue to be supercharged by pent-up demand as a result of the spring/summer lockdown, as well as the Chancellor’s waiver on stamp duty for properties up to £500,000.”
As mentioned above, the stamp duty holiday has had an overwhelmingly positive effect on the UK property sector, but as Russel concedes these government measures “will not continue indefinitely”. As such, it will be interesting to see whether the UK’s housing market, having recently entered a second nationwide lockdown, continues to flourish once the now-extended furlough scheme and stamp duty holiday expires at the end of March.
Concluding his statement, Russel adds: “While Government support measures have undoubtedly helped to delay the expected downturn in the housing market, they will not continue indefinitely and, as we move through autumn and into winter, the macroeconomic landscape in the UK remains highly uncertain. Though the renewed lockdown is set to be less restrictive than earlier this year, it bears out that the country’s struggle with COVID-19 is far from over. With a number of clear headwinds facing the housing market, we expect to see greater downward pressure on house prices as we move into 2021.”