Yahoo Finance UK house prices soar to record high in September
The UK average house price rose by 11.8% to a record high of £270,000 ($36,271) in the year to September, up from 10.2% in August, and £6,000 higher than the previous all-time high set in June.
According to the Office for National Statistics (ONS), this marked a £28,000 rise compared to the same period a year ago.
On a non-seasonally adjusted basis, average house prices in Britain increased by 2.5% between August and September 2021.
Property prices gained some £7,000 alone in the space of one month, as potential homeowners looked to complete deals before the end of the reduced stamp duty holiday.
September was the final month buyers could benefit from the government’s stamp duty holiday, a tax break designed to prop up the housing market, and help consumers as the economy contracted during the COVID-19 lockdowns.
The holiday was extended from 31 March 2021 to the end of June and once more, tapering from June to the end of September, as people rushed to market.
Housebuyers could have cashed in on savings of up to £15,000 if they bought at the right time.
The break caused a frenzy in the market, with many using it as an excuse to make long-awaited moves or buy for the first time. However, some said that with an increase in house prices during the past year, the discount was quickly priced in and that it "distorted" the market.
The ONS said on Wednesday that a “race for space” also contributed to the climb in prices, with Brits looking to move to larger properties amid an increase in remote and hybrid working.
Read more: UK house prices jump on supply crunch
Average house prices increased during the year in England to £288,000, a 11.5% rise, in Wales to £196,000, up 15.4%, in Scotland it climbed 12.3% to £180,000, and 10.7% in Northern Ireland to £159,000.
On a regional level, London continued to be the worst performer, with the lowest annual growth for the tenth consecutive month, coming in at just 2.8%, down from 6.7% in August 2021. This represented the lowest annual growth in London since July 2020.
Despite being the region with the lowest annual growth, average house prices in the capital remain the most expensive of any region in the UK, at an average of £507,000 in September.
The North West saw the strongest annual growth during the period, with average prices increasing by 16.8% in the year to September 2021. This was up from 11.6% in August 2021.
Read more: UK house prices could surge as fewer properties come on market
“These latest figures certainly show the last of the stamp duty sizzle as homebuyers made a final push to secure a saving ahead of the extended deadline,” Director of Benham and Reeves, Marc von Grundherr, said.
“This phenomenal rate of growth is likely to slow in the coming months, not only in the wake of the stamp duty holiday, but as the usual festive lethargy starts to build and many homebuyers and sellers now look beyond the Christmas period with a view to moving.”
Meanwhile Sarah Coles, senior personal finance analyst, Hargreaves Lansdown said: "We would expect house price growth to slow in the coming months, and if we get interest rate rises over the next few months, this could provide even more of a drag on prices. However, we’re still expecting prices to keep rising, because there are so few properties on the market.
"Buyer numbers are still outstripping sellers, and the number of properties on agents’ books continues to shrink. It means more people chasing fewer properties, which means prices are unlikely to fall in the immediate future."
Watch: Why are house prices rising during a recession?
