The latest UK House Price Index, from the Land Registry and the ONS, reveals a further rise in house prices. Over the year to August, house prices in the UK rose by 10.6%, compared to 8.5% in July. The average house price is now £25,000 higher than twelve months ago, at £264,000 in August.
Scotland saw the biggest increase in average house prices at 16.9%, followed by 12.5 in Wales, 9.8% in England and 9.0% for Northern Ireland.
In England, the region with the highest annual house price growth was the North West, with an increase of 13.3% over the year to August. London had the lowest annual growth, at 7.5%, as it has for the last nine months.
Director of Benham and Reeves, Marc von Grundherr, commented: “Yet further proof that the drop in property prices following the initial stamp duty holiday deadline was merely a pause for breath in an otherwise marathon run of positive market momentum.
“There’s little sign of this letting up and should an increase in interest rates materialise, the likelihood is that it will be fairly palatable for the average homebuyer. Therefore, we don’t expect it to have any notable impact on the nation’s insatiable appetite for homeownership and the market should continue moving forward at pace well into next year.”
Managing director of Barrows and Forrester, James Forrester, said: “The current state of the market is quite remarkable given what we’ve been through as a nation since the start of last year. Employment and wage growth have remained firm, mortgage affordability is still hovering around record lows and house prices continue to climb ever higher.
“As a result, buyers continue to mob the market and while an interest rate hike is on the horizon, we expect these factors to continue to stimulate positive house price growth for the remainder of the year.
“Forget about a shortage of HGV drivers, we need more estate agents to get us through until Christmas.”
Rob Barnard, director of intermediaries at Masthaven, the UK bridging loans and development finance bank, added: “The continued ‘race for space’ created by the pandemic has continued to drive up house prices, with the tapering of stamp duty relief over the past year hardly slowing momentum down. While booming levels of buyer activity are certainly encouraging, it is difficult to know if they will last. The end of the government support schemes, as well as expected tax hikes in the new year, could serve to weaken demand going forward.
“Indeed, the country’s economic outlook over the coming winter looks uncertain, from rising inflation to extensive supply chain issues. Amid this backdrop, borrowers will require the guidance of specialist lenders now more than ever to ensure they can get on the housing ladder. Prospective buyers struggling to buy a home, or those who have seen their financial circumstances take a knock over the past 18 months, will need the advice and personalised products which specialist lenders can provide. It will be vital that specialist lenders continue to innovate and develop tailored products and collaborate with brokers to understand the unique and shifting needs of customers.”
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Masthaven recently promoted Michaela McQueen to senior lending operations manager. Michaela has been with the bank for nearly six years, having started as an underwriter then underwriting manager, and was promoted to business readiness manager in 2020.