The Office for National Statistics (ONS) has issued its latest house price index, to June 2021.
UK average house prices increased by 13.2% over the year to June 2021, up from 9.8% in May 2021; this is the highest annual growth rate the UK has seen since November 2004. This increase was driven by the North West and North East of England, as well as Wales, Yorkshire and the Humber.
There was an extraordinary seasonally-adjusted rise of 4.2% between May and June 2021 following a 0.5% rise in the previous one month period.
UK average house prices reached a record high of £266,000 in June 2021, which is £31,000 higher than this time last year.
Average house prices increased over the year in England to £284,000 (13.3%), in Wales to £195,000 (16.7%), in Scotland to £174,000 (12.0%) and in Northern Ireland to £153,000 (9.0%).
London continues to be the region with the lowest annual growth (6.3%) for the seventh consecutive month.
Reactions to the news
Property commentator Henry Pryor tweeted a line that should be heeded by all:
“These numbers are based on tiny transaction number during 1st Lock Down last year AND on the rush to beat the end of the extended Stamp Duty Holiday. Use with caution.”
George Franks, co-founder of London-based estate agents, Radstock Property:
“Price growth of over 13% in the year to June is borderline obscene. It’s a result of the stamp duty holiday, an egregious lack of homes for sale, ridiculously cheap mortgages and the new homeworking culture, which has triggered a rush of transactions. London may have delivered the lowest price growth over the past year but the capital is likely to cool the least in the year ahead. Areas of the UK that have risen the fastest may also fall the fastest when the inevitable cooldown begins.”
Iain McKenzie, CEO of The Guild of Property Professionals:
“These figures paint an arresting picture of the frenzy we saw towards the end of the full stamp duty holiday as house prices boomed with buyers rushing to get their key in the lock.
“Areas outside of London still continue to lead the way on house price growth, as people scour the country for more living space.
“Despite the winding down of the stamp duty holiday and more people feeling the pressure to return to the office, all the elements are still in place for house prices to remain higher than usual for the foreseeable future.
“With demand for properties still ever-present and estate agents across the country facing a smaller pool of homes to sell, many prospective buyers will also be sitting on their deposit until the perfect home comes along. This factor will keep prices higher in the long term.”
Lucy Pendleton of James Pendleton:
“Prices went berserk as the stamp duty taper closed in. The pace of growth set in the North West is frankly astonishing. This is the last time this year, or even in our lifetimes, that you’ll see growth spurts like this in response to government support.
“Scenes like this are only possible in those areas starting from a lower base, and there’s a big question mark over how many of these buyers really made a saving. Amid fierce competition, there’s a good chance that many of them became so committed to a particular move that the financials were thrown out with the bath water.”
Sam Mitchell, CEO of online estate agent Strike:
“House prices continued on their upwards trajectory in June, with the latest ONS figures capturing the final frenzy amongst buyers and sellers before the stamp duty holiday scaled back.
“Despite the tax break now only being available to properties under £250,000, there are still other factors at play that will likely contribute to further house price increases in the months ahead. Historically low interest rates, an uplift in 95% mortgages and savings accumulated during lockdowns are all going to allow more people to enter the market.
“Let’s also not forget that the UK is still faced with a major supply and demand imbalance issue. A lack of new stock that fails to meet the demand we see today is enough on its own to push prices up. Particularly when we all appear to be looking for the same thing – a desire for more space, bigger gardens, and that now essential home office.”
A London agent, Radstock, commented that prices rising by 13% is “obscene” and yet house prices doubling in parts of London over the last 10 years isn’t?
Prices didn’t rise by 13% in London last year and this agent is way off the mark with his comments and he needs to check his facts. It sounds as if he has decided prices are too high and he would like to bring them down.
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The house price “growth” is broadly the same as the increase in money supply, as it is every year. Due to this increase in money supply, the pound has effectively lost about 13% of its value while house values have remained stable.
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The first part of a serious inflation problem,
also the problem with the housing crisis is that 65% of the population are homeowners, and if magically tomorrow there was enough property for everyone, we’d likely all lose at least 10% value on our homes and a lot of people would be negative equity, so there’s a conflict of interest almost where if we fix the problem then in the short term we all lose out
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Snapshot commentary is sensationalist. Has everyone forgotten the Brexit market we had for 4 years. Look at house prices over longer periods. June 2016 (Brexit vote) – June 2021 prices have risen a more modest 25%. IE 5% per annum. Look further back. Since June 2007 prices have risen 42% or 3% per annum. Trends need to be examined over longer periods or we get crazy comments and reactions. I can see this market levelling out over the back end of this year with 2022 being the new normal. I mean, what did everyone expect with 4 years of pent up demand and supply being released after the election and accelerated by the stamp duty holiday. The total value of privately owned homes in the Uk has risen by £825,000,000,000 in one year. That’s the additional equity we now have in the UK market. Tax free, un-earned income. Money to burn on credit cards, loans, moving home, home improvements, holidays, clothes, staycations, Amazon etc. A lot of which will be going back into out economy. Well done Rishi and Boris!!
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You sound like a socialist LOL
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However you try to describe this debacle, the government’s fiscal policies are responsible and the only people who can deal with the resulting crisis are the government. They should be expected to do so and not to just leave things to go their own way, enabling some to profit obscenely from the outcome at the expense of many others.
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