Annual House Price Index Rises
Latest data from GOV.UK shows that the average UK house price increased by 10.6% over the year from August 2021, which is up from just 8.5% in July.
Due to the impact of COVID-19 on both the number and supply of housing transactions, there could be larger revisions to the published House Price Index (HPI) estimates than usual.
Within the latter half of 2020, the UK saw the average house price growth accelerating. This trend then continued into 2021 as the average house price for August 2021 was £264,000, which was an increase from £257,000 in July 2021.
In England, the average house prices increased over the year to £281,000, £195,000 in Wales, £181,000 in Scotland and £153,000 in Northern Ireland respectively. In contrast to this, London saw the lowest annual growth of 7.5% for the ninth consecutive month.
Paul Stockwell, Chief Commercial Officer at Gatehouse Bank, comments: “Continued home buyer demand saw prices rebound in August after a slump the previous month.
“Buyers will have been driven to capitalise on the final stamp duty savings which were available until the end of September.
“However, it is the desire for homes in locations which were once viewed as not accessible before working from home that continue to push up prices. At the same time, stock levels have yet to bounce back enough to tame much of this demand.
“Home-movers have been largely behind the demand seen over the past year, but they are being joined by growing numbers of first-time buyers and international investors.
“The availability of mortgages requiring smaller deposits mean first-time buyers are returning, while easing of travel restrictions is drawing international investors back.”
Commenting on the latest ONS House Price Index, Stuart Law, CEO of the Assetz group, said: “Today’s data shows a continued upward trend in house price growth. Many industry commentators have been speculating that we’ll see a short-term boost to prices fuelled by further buying over coming months ahead of expectations that interest rates will be raised modestly, followed by a slow down in the market afterwards.”
“We, however, do not believe this short-term surge to be the most likely case. In our view, interest rates will not move enough to impact the market, particularly in the short term, but instead the longer-term increases in demand from post-pandemic changes to housing trends and also our expectation that labour and materials shortages will continue have a significant bearing on housing supply and that will drive up house prices consistently over the next year or two.”
“Given the current shortfall of appropriate housing stock in the UK at present, as well as recent predictions from Savills that the number of houses being built will not return to pre-pandemic levels until 2026 and even then will remain 20% short of Government targets, there is a clear opportunity for SME housebuilders to meet consumer demand with their expert local knowledge and rapid adoption of innovative housebuilding processes. In particular, with the ongoing energy crisis placing greater importance on the energy efficiency of homes than ever before, such businesses are in prime position to deliver much-needed ‘green’ housing through their use of modern methods of construction which are more precise and produce more eco-friendly homes.”
“We’ll be paying close attention to the Chancellor’s Budget next week and hope that improved access to alternative funding for such housebuilders is among the key environment-focused initiatives he is expected to announce given that the banks are pulling back loan support for SMEs at a rate not seen in the last 10 years.”
If you would like to read more stories like this, then please click here
The post Annual House Price Index Rises appeared first on UK Construction Online.