According to their data, The average house price rose by +1.2% in the three months to the end of August, taking the annual rate of price growth to +6.1%, up from 2.8% in August 2020. This brings the average value of a home across the UK to £235,000.
As has been the case for six months, Wales is recording the highest level of price growth at +9.8%, followed by Northern Ireland (+8.4%) and the North West of England (+8%).
Zoopla says that price growth in Liverpool continues to be the highest among the UK’s major cities, with average prices up +9.8% in the 12 months to September. Manchester and Sheffield are also registering high levels of growth, at +8.1% and +7.6% respectively. At the other end of the spectrum in terms of house price growth is London, with average values up 2.2% on the year, below inflation.
As examined in previous reports, in the face of the very strong buyer demand evident since May last year, average home values have risen by a greater margin in regions and towns where relative affordability is greater. London is the region which has the greatest affordability constraints, with the average house price now above half a million pounds.
In addition, demand levels have also trailed in parts of London over the last 18 months due to the lack of international travel, and slower domestic demand as a cohort of buyers looked to move into the wider commuter zone or further afield amid a new flexible working environment.
Zoopla suggests that there are now signs that this trend is starting to turn, with buyer demand in the capital up 14% over the last month. This translates into a 25% rise in demand for houses across London and a 6% rise in demand for flats, as life continues to return towards normality.
Gráinne Gilmore, Head of Research, Zoopla, comments: "The demand coming from buyers searching for space, and making lifestyle changes after consecutive lockdowns, has further to run.
"Balancing this, however, will be the ending of government support for the economy via furlough, and more challenging economic conditions overall, which we believe will have an impact on market sentiment as we move through Q4.
"We expect the market to remain busy compared to historical norms, and for price growth to remain in firmly positive territory at the end of the year, although lower than current levels of +6.1% and stock levels will start to rebuild in early 2022 as market activity returns to more normal levels."
