Monthly house price growth jumps to 1.7% in September

UK house prices climbed by 1.7% in September as the stamp duty holiday drew to a close.

According to the latest Halifax House Price Index, this rate of monthly growth was the strongest since February 2007, and added more than £4,400 to the value of the average UK property.

Year-on-year house price inflation also climbed to 7.4% up from 7.2%, reversing a three-month downward trend that had seen annual house price inflation fall from a peak of 9.6% in May.

Halifax stated that the figures mean the average price of a UK property now stands at a record £267,587.

“While the end of the stamp duty holiday in England – and a desire amongst homebuyers to close deals at speed – may have played some part in these figures, it’s important to remember that most mortgages agreed in September would not have completed before the tax break expired,” commented Halifax managing director, Russell Galley.

He added that multiple factors have played a “significant role” in house price developments during the pandemic.

“The ‘race for space’ as people changed their preferences and lifestyle choices undoubtedly had a major impact,” Galley said. “Looking at price changes over the past year, prices for flats are up just 6.1%, compared to 8.9% for semi-detached properties and 8.8% for detached. This translates into cash increases for detached properties of nearly £41,000 compared to just £6,640 for flats.

“Against a backdrop of rising pressures on the cost of living and impending increases in taxes, demand might be expected to soften in the months ahead, with some industry measures already indicating lower levels of buyer activity. Nevertheless, low borrowing costs and improving labour market prospects for those already in employment are likely to continue to provide support.

Commenting on Halifax’s data, head of mortgages at online mortgage broker Trussle, Miles Robinson, added: “With such little housing stock across the country, it is very likely that momentum will continue, and the market will remain active in the coming months.

“Additionally, mortgage rates remain low and have not yet been affected by the rise in inflation. Some lenders are offering products with interest rates below 1% – certainly something to take advantage of as rates look set to increase in the not too distant future.”

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