House prices rise £25k in a year, ONS data shows

Property prices rise £7k IN A MONTH despite stamp duty incentive fizzling out, official data shows – with Scotland seeing huge growth

  • Official figures show 10.9% house price increase in year to August 2021
  • Scotland has seen the biggest price growth: nearly 17% in a year 
  • Average home is now worth £264,000, £1,000 less than all-time high
  • Low mortgage rates are encouraging buyers – but this could soon change

The price of a home rocketed by £25,000 in the year to August as the pandemic property boom carried on despite the stamp duty holiday tapering out, official figures have shown.

House prices grew 10.6 per cent in the 12 month period, up from the 8.5 per cent growth seen in July, according to the latest house price index from the Office for National Statistics. 

The average home in Britain is now worth £264,000, up from £257,000 in July but £1,000 below the record high set in June. 

Hot market: A UK home is now worth £264,000, having increased 10.6% in the last year

The typical price is highest in England, where prices have increased 9.8 per cent in a year to £281,000.

But Scotland and Wales both saw bigger percentage growth, with prices rising 16.9 per cent to £181,000 and 12.5 per cent to £195,000 respectively.

In Northern Ireland, prices grew 9 per cent to £153,000.

The price rises in the past year or so have been impacted by the Government’s stamp duty holiday, introduced in July 2020.

Buyers could save up to £15,000 as they did not need to pay tax on the portion of their property purchase below £500,000.

However, the tax saving would have had a limited impact on the housing market in August.

The stamp duty holiday ended on 30 September 2021 in England and Northern Ireland, on 31 March in Scotland and on 30 June in Wales.

This was tapered down for the final three months in England and Northern Ireland, when buyers could make a maximum £2,500 saving.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: ‘Although these figures are a little dated, they demonstrate once again the resilience of the market, which was still rocking and rolling in August even though buyers at that time would have been unable to take advantage of the stamp duty tax break.

‘Continuing shortage of stock, low interest rates, unexpected savings and government support schemes are underpinning buying and selling activity.’

Record-low mortgage rates with interest as little as 0.86 per cent are still encouraging buyers, however – especially as these could rise if the Bank of England increased its base rate to curb rising inflation, as many are predicting. 

Monthly property transaction statistics published by HM Revenue and Customs show that the seasonally adjusted number of transactions in August 2021 was 98,300.

This is a similar level of monthly transactions seen prior to the start of the pandemic, and more than the 74,470 seen in July, However, it is less than half the 198,900 transactions made in June 2021.

Regionally, the North East was the region with the highest annual house price growth in August, with average prices increasing by 13.3 per cent in the previous year.

The lowest annual growth was in London, where average prices increased by 7.5 per cent over the year to August 2021, though this was an improvement from the 2.9 per cent seen in July 2021 and represents the strongest annual growth in London since August 2016.


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