UK house prices rose at the fastest pace since 2004 in June as the race to beat the end of a tax incentive, the need for more space and low interest rates boosted demand for housing.
Average house prices increased 13.2 per cent in the year to June 2021, up from an annual rate of 9.8 per cent in May 2021, data from the Office for National Statistics showed on Wednesday.
The jump was the highest annual growth rate the UK has seen since November 2004.
George Franks, co-founder of London-based estate agents Radstock Property, described the increase as “borderline obscene.”
The average price of a home in the UK now sits at a record high of £266,000, up £31,000 from the same time last year.
“Purchases completed in June were boosted by the rush to beat the deadline for the removal of all tax savings in Wales and the majority of the potential stamp duty savings in England and Northern Ireland,” said Mike Scott, chief analyst at estate agency Yopa.
From July 1, the threshold up to which buyers in England avoid a stamp duty tax decreased from £500,000 to £250,000. From October, thresholds will revert to the levels charged before the introduction of the measure in July 2020.
The rise in house prices was stronger in the north-west where it reached 18.6 per cent, while in London, prices grew at 6.3 per cent.
London was the region with the lowest annual growth for the seventh consecutive month, the ONS reports.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said that “the race for space means buyers’ money is going further outside the capital, inevitably pushing up prices”.
Data from the mortgage provider Nationwide showed that the pace of house price growth eased in July.
House prices have risen sharply across many advanced economies during the pandemic as low interest rates and accumulated savings have boosted demand for housing at a time when many have reassessed their priorities for space and location.
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