House prices rise at fastest rate since housing boom of 2007 as ‘race for space’ continues despite end of stamp duty holiday Halifax data

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  • Average UK house prices jump 1.7% in September to new high of £267,587
  • This is the fastest monthly increase since February 2007, Halifax said.
  • On an annual basis, price inflation rose to 7.4% from 7.2% in August
  • Prices of detached and semi-detached have increased at a faster rate than flats

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Home prices have risen at the fastest pace since the housing boom of 2007, as the ‘race for space’ continues despite the end of the stamp duty holiday.

Data from mortgage lender Halifax shows that the average UK house price jumped by around £4,400, or 1.7 per cent, between August and September, the sharpest increase since February 2007.

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On an annual basis, price inflation rose to 7.4 per cent from 7.2 per cent in August, with the average home price now at a new high of £267,587.

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‘Race for space’: prices of detached and semi-detached have risen faster than flats

Halifax said prices of detached and semi-detached homes have risen at a much faster rate than flats, showing that people looking for larger homes ‘undoubtedly had a major impact’.

Average flat prices have increased by 6.1 percent over the previous year, as compared to 8.9 percent for semi-detached properties and 8.8 percent for detached properties.

According to the report, this translates into a cash increase for detached properties of around £41,000, compared to just £6,640 for flats.

Halifax managing director Russell Galli said: ‘While the end of the stamp duty holiday in England – and the desire among home buyers to close deals faster – may play some part in these figures, it is important to remember that most The mortgage agreed doesn’t complete before the tax break ends in September.

‘This suggests that a number of factors have played a significant role in the evolution of home price during the pandemic.

The ‘space race’ as people changed their preferences and lifestyle choices undoubtedly had a major impact.’

Annual housing price growth rose to 7.4% in September from 7.2% in August

Annual housing price growth rose to 7.4% in September from 7.2% in August

Meanwhile, a limited supply of properties, amid a further reduction in the number of homes for sale, and lower mortgage rates are likely to support prices next year, even if growth is likely to slow, Galli said. .

Nikki Stevenson, managing director of National Estate Agent Group Fine & Country, said: ‘As the market’s crutches have been lifted, home price growth has accelerated.

‘This is completely contrary to the logic laid down in September and tells you that the rally is not over yet.’

And added: ‘The pandemic has done more than turn a head of record highs.

‘Changes in property buying habits can lead to some permanence in what has so far been only an article of trust, even once you factor in the persistent shortage of stocks that are a floor below prices. continues to hold.’

But Tom Brown, managing director of real estate at Ingenius, said the market is complex when we look at the headline numbers.

‘While many volumes continue to develop, for example, city center flats, do not always paint the same overall picture of demand, which has diminished as people seek more outdoor space, homes with gardens, practical workspaces. And let’s look forward to quality infrastructure.

‘When analyzing residential markets, it is important that we take a look at the sub-sectors and the areas in which they are located.’

Limited supply: Estate agents are reporting further reduction in the number of homes for sale

Limited supply: Estate agents are reporting further reduction in the number of homes for sale

Lucy Pendleton, property expert at independent property agents James Pendleton, said: ‘The last time we saw monthly price increases like this, Tony Blair was prime minister.

‘For all the talk of this rally slowing down, it is still where some of the fastest markets on record are.

‘However, London is underperforming. Average prices in the capital are so high that periods out of limelight are not a problem on paper, but investors are keeping a close eye on London’s post-pandemic recovery.

Home movers pushed into higher stamp duty bracket

While stamp duty has invited more people to go home, the steep rise in prices has often proved to be a false economy.

Home buyers were spared from paying taxes on homes up to £500,000 until July, when this limit fell to £250,000 until October, when it reversed to the usual £125,000.

Halifax noted how in June 2020 – a month before tax cuts were introduced – the typical value for a UK property was £239,317, meaning buyers would have to pay around £2,300 in stamp duty.

But as of September 2021, average home prices were some £28,270 higher – 12 times that initial savings.

Now, with the tax break over and home prices hitting a new record high of over £267,500, home buyers face bills of around £3,400 as they are pushed into a higher stamp duty bracket. – A tax rate of 5 percent applies between £250,000 to £925,000, Halifax said.

How are prices changing in different regions?

Annual Growth and Average Price per Area

East England, £310,664, 7.2%

East Midlands, £219,631, 8.0%

London, £510,515, 1.0%

North East, £155,683, 8.0%

North West, £201,927, 9.0%

Northern Ireland, £166,299, 9.3%

Scotland, 188,525, 8.3%

South East, £360,795, 7.0%

South West, £276,226, 9.7%

Wales, £194,286, 11.5%

West Midlands, £225,404, 7.2%

Yorkshire and Humber, £186,815, 8.9%

Source: Halifax

Wales and Scotland have seen some of the sharpest increases in prices, even though the stamp duty holiday ended earlier than in England.

Wales recorded the strongest home price inflation of any region in the UK in September, with an annual increase of 11.5 per cent and an average price of £194,286.

But Greater London has been the worst performer as prices have risen just 1 per cent last year.

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