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Annual UK house prices surged 13.4% in June, with London gains recorded

·2-min read
The housing market has been boosted by a stamp duty holiday (PA)
The housing market has been boosted by a stamp duty holiday (PA)

Average UK house prices surged 13.4% year on year in June, the month when buyers could take advantage of the full stamp duty holiday for the last time.

Prices reached £245,432 this month , according to the Nationwide Building Society. That is 13.4% ahead of last year, the highest level since November 2004. The figure is also 0.7% above May’s price.

The mortgage lender’s chief economist Robert Gardner pointed out that June was unusually weak last year as the market faced disruption from the first lockdown. But he added: “The market continues to show significant momentum.”

Regional data for the three months to June points to all parts of the UK seeing acceleration in annual house price growth. The largest gains were in Northern Ireland and Wales in the second quarter.

Scotland saw the weakest rate of annual growth, at 7.1% closely followed by London at 7.3%.

The market has been boosted by a number of factors, including people reassessing housing needs during lockdowns, with many buyers seeking more space, and a recent new mortgage guarantee scheme to help people with a 5% deposit get on the property ladder.

A suspension of stamp duty on property sales of up to £500,000 was also introduced last year to help the market following initial disruption from Covid-19.

The current holiday ends after June 30, and then from July 1 to September 30 the threshold will fall to £250,000.

Nationwide’s Gardner said consumer confidence has rebounded while borrowing costs remain low. He said that, combined with a lack of supply on the market, suggests further upward pressure on prices.

However, he cautioned: “Activity will almost inevitably soften for a period after the stamp duty holiday expires at the end of September, given the strong incentive for people to bring forward their purchases to avoid the additional tax.”

Tobi Mancuso, director of property investment company Track Capital, said:“The housing market is like the Wild West at the moment - and properties are flying off the shelves whether they’re good, bad or ugly. A scarcity of properties and the stamp duty holiday has created a situation where buyers feel like they’re in the last chance saloon, creating panic buying and pushing up asking prices.”

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