Despite the data being a little dated, the official government figures reveal that average UK house prices reached £264,000 in August 2021 - £25,000 higher than this time last year.
When looking at prices on a regional level, average house prices increased over the year in England to £281,000 (9.8%), in Wales to £195,000 (12.5%), in Scotland to £181,000 (16.9%) and in Northern Ireland to £153,000 (9.0%).
London continues to be the region with the lowest annual growth (7.5%) for the ninth consecutive month.
Anna Clare Harper, CEO of property consultancy SPI Capital, says: "The temporary stamp duty reduction, alongside billions of pounds worth of loans and grants, was designed to protect consumer and investor confidence through the pandemic. Combined with lockdown-led upsizing, low-interest rates making finance cheap, and competition amongst lenders, this has added to housing demand and a price boom, whilst supply is restricted.
"The trouble is, rising house prices are in direct conflict with other government objectives. More expensive housing makes homeowners feel confident, which is great for the economy but also makes housing less affordable and less accessible. This is a recipe for social disaster since it comes at a time when many landlords are giving up due to the burden of laws and regulations affecting properties and their management.
"The housing market has the potential to solve many social, economic, and indeed political problems. However, it also has the potential to increase divides in society. Perhaps the most obvious are geographical and age divisions. Firstly, there’s the ‘North-South’ divide, to be tackled by ‘levelling up’. Secondly, there’s the widening gap between older and younger generations, which is most likely to be tackled through tax.
"In terms of what next, the housing market will continue to be vital to our economy, and also vital to the achievement of wider government policy. It’s hard to see a future without tax reform of some kind to level the playing fields between the older ‘haves’ and younger ‘have-nots’"
Kevin Roberts, Director at Legal & General Mortgage Club, comments: “Structural factors have continued to drive unprecedented levels of buyer activity, from the enduring ‘race for space’ amid remote working, to the very affordable mortgage rates that are available to borrowers today.
“However, it is also possible that this uptick stems from the return of international buyers. In fact, our SmartrCriteria tool revealed that searches made on behalf of international buyers grew by 160% in August. Naturally, this coincided with the easing of international travel restrictions and the slowing of domestic purchase activity as the Stamp Duty holiday drew to a close.
“Whether such levels of demand will persist through Q4, however, is uncertain and seeking the guidance of an experienced adviser will be key as we face into the next few months. Independent mortgage advisers are well-placed to offer bespoke recommendations and inform borrowers of the best deals to help turn this corner.”
