UK house prices in September registered the biggest monthly gain in more than 14 years as the stamp duty discount came to an end while the “race for space” pushed buyers to look beyond London.
The average house price rose 1.7 per cent last month compared with August, the fastest monthly gain since February 2007, according to data from the mortgage provider Halifax.
Compared with the same month last year house prices were up 7.4 per cent, an acceleration from 7.2 per cent in the previous month, which pushed the average house to just over £267,500, the highest on record.
September’s spike in prices “shows the pandemic boom is still alive and well”, said Jonathan Hopper, chief executive of Garrington Property Finders.
The end of the stamp duty holiday in England and a desire among homebuyers to close deals at speed could have played some part in these figures, said Russell Galley, managing director at Halifax.
The fast rise reflects other factors as most mortgages agreed in September would not have been completed before the tax break expired, he added.
From October, thresholds up to which buyers in England and Northern Ireland could avoid paying stamp duty will decline from £250,000 to £125,000, the level before July 2020, when the tax holiday was introduced to stimulate the housing market following the first national lockdown. Until July 1, the threshold was £500,000.
“The ‘race-for-space’ as people changed their preferences and lifestyle choices undoubtedly had a major impact,” said Galley. Prices for flats rose 6.1 per cent, compared with 8.9 per cent for semi-detached properties and 8.8 per cent for detached.
Greater London remains the outlier, with annual growth of just 1 per cent and was again the only region or nation to record a fall in house prices over the latest rolling three-monthly period.
“The driving force [of the price rise] is now old-fashioned market fundamentals, and the chronic imbalance of supply and demand,” said Hopper.
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