The average house price in the UK increased by 2.6% over the year to April 2020, down from 3.5% in March, new data published by the Office for National Statistics (ONS) has revealed.

The latest UK House Price Index from the ONS showed that average house prices increased over the year by 2.5% in England to £251,000, by 5.0% in Wales to £169,000, by 1.6% in Scotland to £153,000, and by 3.8% in Northern Ireland to £141,000.

The data also revealed that London’s average house prices increased by 2.3% over the year to April.

This was the first publication of the UK House Price Index from the ONS since it was suspended in May, and includes data up to April 2020 only.

The ONS stated that the index is based on completed housing transactions and that since a house purchase can take six to eight weeks to reach completion, the price data feeding into April’s index reflect agreements occurred before the Government’s measures to reduce the spread of COVID-19 took hold.

CEO at online estate agent Strike, Sam Mitchell, commented: “The latest stats from the ONS confirm what we already knew as property transactions started to come to a halt over the lockdown period with house prices falling from March. But the good news is, today we have a very different picture in front of us.

“Now that restrictions have been lifted, property demand is booming and being released into a low-interest-rate environment, the Government’s stamp duty holiday has been like fuel thrown on the fire. Over the past few months, we’ve seen at least a 50% increase in demand from buyers now versus before lockdown and we are on average agreeing twice as many sales per week as we were pre-lockdown which is astonishing.”

AJ Bell personal finance analyst, Laura Suter, added: “Initial evidence shows the stamp duty holiday has caused a surge in property prices in the UK since being introduced in July, with the potential £15,000 saving pushing people to move house and offer more for the place they’re buying.

“However, there can be no doubt that the tax cut will create a bubble in property prices as people rush to move house and seal the deal before the stamp duty holiday comes to an end in March next year.

“This spike in demand will cause a rise in prices before transaction numbers fall off a cliff in April next year once the tax saving is whipped away. At the same time the UK will be facing a rise in unemployment and the repercussions of one of the worst recessions on record, which paints a fairly bleak picture for house prices in 2021.”

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