House prices rose at their fastest rate since February 2007 as the stamp duty holiday ended according to a survey released by Halifax recently.
Property Economist Andrew Wishart believes the Halifax house price index indicates house prices are on the rise: “the large rise in the Halifax house price index in September suggests that we are right to think that robust demand and limited inventory will mean that prices record further gains after the stamp duty holiday ends.”
In the survey, a crucial finding was just how quickly, and alarmingly house prices have risen. On average, house prices rose 7.4% in the last year. Of note was a 1.7% increase in September alone following a 0.8% increase in August.
House prices in the South and South East performed the poorest
Although South and East England were cited as the poorest performing regions in the country in terms of annual house price inflation, East of England recorded annual growth rates of 7.2%, while the Southeast displayed figures of around 7%. This may be a warning for those living in the areas, but what was stressed in the survey was the fact these areas held the highest average house prices in the nation.
An anomaly was seen in Greater London, where annual growth rates were as low as 1%. The average house price there was £510,515. Greater London was the only region in England to see a drop in house prices over the latest three-month period.
Russell Galley, Halifax Managing Director, commented on the increasing house price, saying: “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. This shows that multiple factors have played a significant role in house price developments.”
Because of the pandemic, it appears the way in which prices operate has changed significantly. Since last July, the property market in the UK has risen thanks to a temporary reduction in stamp duty.
The concern for so many will be whether house prices will continue to rise? Will there be a correction in the market leading to a fall, like that seen in parts of Greater London, in other parts of England?
Or as speculation continues about an increase in interest rates, will UK house prices fall if interest rates rise?
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