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UK house prices recorded the largest monthly increase in more than 14 years in September as stamp duty cuts ended as the ‘race for space’ pushed buyers to look beyond from London.
Average home prices rose 1.7 percent last month from August, the fastest monthly gain since February 2007, according to data from mortgage provider Halifax.
Compared to the same month last year, house prices rose 7.4%, an acceleration from 7.2% the month before, pushing the average home to just over 267,500 Â£, the highest on record.
September’s price spike “shows that the pandemic boom is still alive and well,” said Jonathan Hopper, managing director of Garrington Property Finders.
The end of the stamp duty holidays in England and homebuyers’ desire to close deals quickly may have played a role in those numbers, said Russell Galley, chief executive of Halifax.
The rapid rise reflects other factors, as most of the mortgages agreed in September would not have been concluded before the tax break expires, he added.
From October, the thresholds at which buyers in England and Northern Ireland could avoid paying stamp duty will drop from Â£ 250,000 to Â£ 125,000, the level before July 2020, when the tax holiday was cut. introduced to stimulate the housing market after the first nationwide foreclosure. Until July 1, the threshold was Â£ 500,000.
âThe ‘space race’ as people changed their preferences and lifestyle choices has undoubtedly had a major impact,â said Galley. Apartment prices rose 6.1%, compared to 8.9% for semi-detached properties and 8.8% for single-family homes.
Greater London remains the outlier, growing only 1% annually, and was once again the only region or nation to record a drop in house prices in the last rolling three-month period.
“The driving force [of the price rise] now are the old-fashioned market fundamentals and the chronic imbalance of supply and demand, âHopper said.