According to the latest data from the Land Registry, house prices increased by almost 5pc year on year in September.
Data published on Wednesday show that the average house price rose by 1.7pc in September compared to the previous month, further evidence of the beneficial effect of Covid-19 on the property market. The price of the average property in the UK in September stood at £244,513, the UK House Price Index (HPI) has revealed.
According to the figures, average house prices rose over the year by 4.9pc in England, 3.8pc in Wales, 4.3pc in Scotland and 2.4pc in Northern Ireland. At a regional level, the South West saw the highest annual house price growth in England, an increase of 6.4pc to £275,000 in the year to September, a rise of 3.2pc from August.
In London, average house prices also hit a record high of £496,000. Whereas at the other end of the scale, the North East saw average prices grow by 3.3pc over the year to September 2020.
The data, although historical, are interesting for two reasons. First, they illustrate the extent of the property boom and second, show more clearly than earlier data the impact of the stamp duty holiday on prices.
Nicky Stevenson, Managing Director at national estate agency Fine and Country, believes no sector of the UK economy has weathered the coronavirus storm better than the property market and the prospects have only strengthened across the board.
This is the first time, she said, that the index has included sales that not only benefited from the stamp duty tax break, but were motivated by it, and it clearly shows.
Space seekers
The market sector which saw the greatest increase in prices was detached homes, as confirmed by other house price analyses. In fact, the Land Registry’s figures show that such properties, having increased by 6.2pc since September 2019, now have an average price of £375,492 compared to £353,533 at the same time last year.
In contrast, flats and maisonettes saw the least growth over the past year, increasing by a meagre 2pc.
Anna Clare Harper, CEO of asset manager SPI Capital, commented that house prices are now being driven ultimately by a combination of new policy and new priorities. Importantly, many homeowners have been motivated to move because of the desire for more space as well as the temporary stamp duty changes.
Consequently, and not surprisingly, detached and semi-detached homes led the field in price increases.
Outlook for house prices
Much of the discussion around the release of Wednesday’s figures concerns the sustainability or otherwise of this impressive growth, although all the evidence suggests that the UK has indeed experienced a property mini-boom.
Andrew Montlake, Managing Director of mortgage broker Coreco, thinks the outlook has improved due to the imminent release of a Covid vaccine. Despite record highs across many sectors, he says, they’re not the headline story at the moment. But the arrival of a vaccine so early on that few expected could transform the course of the property market during 2021.
The industry as a whole, he added, was expecting a definite downturn in recent house price growth, but the vaccine could well provide a boost to the property market.
Paul Stockwell, Chief Commercial Officer at Gatehouse Bank, raised the prospect of an extension of the stamp duty holiday. Bank of England data, he said, has already confirmed that mortgage approvals in September represented the highest levels of agreed borrowing since before the start of the global financial crisis twelve years ago.
However, he added, it will be interesting to see whether the Government accedes to requests from the industry to extend the stamp duty holiday. As pressure on the resources of the property industry mounts, such a concession would go a long way to reducing the expected logjam in the New Year.
