UK House Price Inflation Slows, Average Price At Record: Halifax

UK House Price Inflation Slows, Average Price At Record: Halifax

September 7, 2021

UK house price annual inflation slowed further in August, but the average price for a residential property hit a fresh record high, survey data from the Lloyds Bank subsidiary Halifax showed Tuesday.

The house price index climbed 7.1 percent year-on-year following a 7.6 percent rise in the previous month, IHS Markit, which releases the Halifax survey results, said.

The annual rate has slowed every month since hitting a peak of 9.6 percent in May. The latest increase was the slowest in five months.

House prices rose for a second straight month on a month-on-month basis. Prices climbed 0.7 percent from July, when they rose 0.4 percent. They had fallen 0.6 percent in June.

Economists had forecast an increase of 1.1 percent.

The average price of a UK home climbed to GBP 262,954 from GBP 261,165 in July. The previous high was GBP 261,642 in May.

House prices were 9.9 percent or more than GBP 23,600 higher compared to June 2020, when the housing market began to reopen from the first lockdown linked to the coronavirus pandemic, Halifax said.

“Much of the impact from the stamp duty holiday has now left the market, as highlighted by the drop in industry transaction numbers compared to a year ago,” Halifax Managing Director Russell Galley said.

“We believe structural factors have driven record levels of buyer activity – such as the demand for more space amid greater home working,” Galley said.

Halifax expects these trends to persist and the price gains made since the start of the pandemic to be sustained once the remaining tax break comes to an end later in September.

Amid record-high job vacancies and consumer confidence returning to pre-pandemic levels, the macroeconomic environment is turning increasingly positive.

“Coupled with a supply of properties for sale that looks increasingly tight, and barring any reimposition of lockdown measures or a significant increase in unemployment as job support schemes are unwound later this year, these factors should continue to support prices in the near-term,” Galley added.

Among regions, Wales remained the strongest performing area, with the only double-digit increase for August. The annual house price inflation in the region was 11.6 percent. The South West also continued to witness strong growth in prices at 9.6 percent, largely reflecting the ongoing demand for rural living within the region.

Greater London continued to lag with just a 1.3 percent annual inflation in house prices in August. On a rolling three-monthly comparison, London was the only region to record a fall in prices at 0.3 percent. That said, the average price of London home was GBP 508,503, which is far above the national average.

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