UK house prices jumped in August, official data showed on Wednesday, as buyers rushed to secure homes before the stamp duty holiday came to an end.
According to the Office for National Statistics, UK average house prices rose 10.6% over the year to August 2021, against an 8.5% rise in July. Month-on-month, house prices rose 2.8% on a seasonally-adjusted basis.
The average house price is now £264,000, £25,000 higher than in August 2020. In England, house prices rose by 9.8% to £281,000; by 12.5% in Scotland to £181,000; and by 9.0% in Northern Ireland to £153,000.
Across all regions, London showed the lowest annual growth, at 7.5%, for the ninth consecutive month.
The stamp duty holiday was introduced in summer 2020 to help support the housing market following the first lockdown. Combined with a surge in demand for larger homes, it helped fuel a property boom. The tax break was phased out over the summer, however, and returned to its £125,000 threshold on 30 September.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “While the threshold already had declined to £250,00 at the start of July, most intended purchases were largely unaffected, because the average house price is £264,000.
“Timelier data suggest that demand has weakened following the return of the threshold to £125,000, but remains above its pre-Covid level. Nonetheless, the adverse impact of the recent rise in markets’ expectations for bank rate has not emerged yet.
“The looming rise in mortgage rates, together with the bleak near-term outlook for households’ real disposable incomes, suggests that house prices will flatline in the first half of 2022.”
The ONS UK house price index is compiled using data from HM Land Registry, Registers of Scotland, and Land and Property Services Northern Ireland.
