UK house prices are rising at the fastest pace since 2004 amid stamp duty rush Housing market – .

UK house prices are rising at the fastest pace since 2004 amid stamp duty rush Housing market – .

UK house prices are rising at the fastest annual rate since late 2004, with a recovery in all regions, according to Britain’s largest construction company.

The average UK house price rose 0.7% in June from May to £ 245,432, taking the annual rate to 13.4% from 10.9% – marking the annual growth rate the highest since November 2004, said Nationwide Building Society in its monthly report.

The UK housing market has been boosted by the extension of government tax breaks for home buyers and an exodus from big cities like London, with movers seeking more space and greener locations after the experience of working in home during the Covid-19 pandemic.

Robert Gardner, Nationwide’s chief economist, said: “Although the strength is partly due to base effects, with June of last year exceptionally weak due to the first foreclosure, the market continues to show a important dynamic. In fact, June experienced the third consecutive monthly increase, after taking into account the seasonal effects. Prices in June were almost 5% higher than in March.

Northern Ireland and Wales recorded the largest gains in the second quarter, with house price growth of 14% and 13.4% respectively. Scotland posted the weakest house price growth at 7.1%, followed closely by London at 7.3%.

The outer metropolitan area around the capital, including suburban towns such as Luton, Watford, Sevenoaks and Woking, saw annual growth of 8.2%.

The Outer South East region, which includes cities such as Brighton and Hove, Oxford, Winchester and Southampton, posted gains of 10.9%, the first time the region has seen double-digit growth since 2014. In the southwest, house price growth reached its highest level since 2010, with prices rising 10.4% year on year.

Despite record home prices, Gardner said, typical mortgage payments are not high by historical standards for take-home pay, as mortgage rates remain near their all-time lows, the Bank’s base rate. England being 0.1%.

However, first-time buyers continue to struggle to save enough for a deposit, as house prices are near an all-time high relative to average incomes. A 10% deposit represents more than 50% of the typical income of a first-time buyer. A potential buyer earning the average salary and saving 15% of their take-home pay would take five years to raise a 10% down payment.

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Outgoing Bank of England chief economist Andy Haldane recently said the market was ‘on fire’ and dramatic price hikes would most likely worsen inequalities among the better-off, many of whom have accumulated savings. during the pandemic, and the youngest. people.

Chancellor Rishi Sunak cut the stamp duty on real estate purchases last summer to reverse the drop in real estate sales at the start of the pandemic. He extended the temporary tax cut in the March budget until the end of June.

Tom Bill, UK Residential Research Manager at Knight Frank Estate Agents, said: ‘We expect UK house price growth to slow after the summer, falling to mid-range figures. by the end of 2021 as the supply increases. The end of the stamp duty holiday and a return to a sense of normalcy will encourage more sellers to list their property and a larger balance to return. “


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