The average UK house price fell £10,000 in July as the full stamp duty holiday ended, ONS figures revealed today.
According to the Land Registry-based index, the typical home was worth £255,535 in July – about £19,000 higher than a year earlier, but significantly below the June peak of £265,448.
This translated into a drop in annual house price inflation to 8 percent in July, from 13.1 percent the previous month.
In a reversal of fortunes for the property market compared to the recent past, the North East is the UK’s hottest property market in terms of average price increases, with housing up nearly 11 per cent in a year, while London posted the lowest gain at 2 per cent , according to figures from ONS.
The North East is the UK’s hottest property market in terms of average price increases, with London posting the lowest gains, US figures show
Mike Scott, chief analyst at real estate agency Yopa, says the numbers show a “big drop,” but points out the June figure has been skewed as people rushed to finalize their purchases before the end of the month to save on their taxes. account.
He explains: ‘The May figure of 9.4 percent is a better comparison, suggesting that there has been only a slight slowdown in the underlying house price growth rate.
Yopa expects further boost in September as people rush to meet last UK and Northern Ireland tax cut deadline [on 1 October], but we don’t expect much delay after the stamp duty savings end.
With housing demand still strong and supply very limited, we expect the underlying rate of annual house price growth to remain around 8 percent at least through the first quarter of 2022, well above wage growth and inflation. of consumer prices.’
In terms of regions, the Office of National Statistics showed average prices increased over the year in England by 7 per cent to £271,000, 11.6 per cent in Wales to £188,000, 14.6 per cent in Scotland to a record £177,000 and 9 a year. cents in Northern Ireland to £153,000.
The North East was the English region with the highest annual growth rate, with average prices rising 10.8 per cent in the year to July to £145,000.
The lowest growth was in London at 2.2 percent. The capital’s average price remains the most expensive of any region in the UK at £495,000.
House prices have surged during the pandemic real estate boom, contrary to predictions that the market could crash during a lockdown
The average UK house price fell £10,000 in July as the full stamp duty holiday ended
Anna Clare Harper, CEO of real estate consultancy SPI Capital, said: “The data reflects the decline of an artificial boom encouraged by the temporary cut in stamp duty.
“Investors, homeowners, lawyers and banks have made every effort to complete transactions on time so that buyers can benefit from lower transaction costs. This was followed by a slowdown in pace.’
Gabriella Dickens, UK senior economist at Pantheon Macroeconomics, said the slowdown “marks the start of a slowdown expected to continue through the rest of the year, following the full reversal of the threshold (land tax) to £125,000 at the end of the year.” end of this month and the looming pressure on real household incomes from higher CPI (Consumer Price Index) inflation and the withdrawal of the leave scheme’.
Separate figures released by the ONS on Wednesday showed that CPI inflation rose from 2 percent in July to 3.2 percent in August – the highest since March 2012.
Nitesh Patel, strategic economist at Yorkshire Building Society, said: ‘For many new buyers, the whole process of realizing their own home dreams has become a lot more difficult.
‘The price of a typical home for a first-time buyer rose 7.7 percent year-on-year to £214,237 in July.
“If they want to make a 10 per cent deposit they now have to save £21,423, compared to £19,318 before the start of the pandemic in February 2020.
“While some will have benefited from keeping their jobs and perhaps increasing their savings, others will have been less fortunate.”
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