UK house price growth remains robust due to post-COVID trends
New official figures show the UK housing market continued on its upward trajectory in August, with house prices increasing 10.6% year-on-year, and up from 8.5% in July 2021.
The government's House Price Index showed that on a non-seasonally adjusted basis, average house prices in the UK increased by 2.9% between July and August 2021, compared with an increase of 1.0% during the same period a year earlier (July and August 2020).
In August, the average UK house price was £264,244 ($364,083).
The upward tick came in spite of the imminent end of the stamp duty holiday, which had buoyed demand through the worst of the COVID-19 pandemic.
"The strength of the market in August is yet more proof that the fundamental life and work changes brought on by the pandemic have been a far greater driver of house price growth than the stamp duty holiday," said George Franks, co-founder of London-based estate agents, Radstock Property.
Many people moved during the pandemic to homes with increased outdoor space or to work remotely in improved areas or spaces.
Read more: UK inflation falls unexpectedly in September, cooling interest rate hike chatter
"What's more, the impact of the pandemic on housing preferences is still only beginning. What people want from their homes has changed beyond recognition and the recalibration of housing needs will play out over years, not months," said Franks.
House price growth was strongest in the North East where prices increased by 13.3% in the year to August 2021. The lowest annual growth was in London, where prices increased by 7.5% in the year to August 2021.
The Royal Institution of Chartered Surveyors’ (RICS) August 2021 UK Residential Market Survey reported buyer demand had steadied in the housing market, after there was a softening in sales in the previous month. House price growth decelerated but is reported to remain firm across the UK.
The Bank of England’s Agents summary of business conditions 2021 Q3 also reported ongoing strong demand for housing across most of the UK and a shortage of properties for sale, which pushed up prices.
Read more: UK house prices see biggest October rise in six years
The UK Property Transactions Statistics showed that in August 2021, on a seasonally adjusted basis, the estimated number of transactions of residential properties with a value of £40,000 or greater was 98,300.
This is 20.9% higher than a year ago. Between July and August 2021, UK transactions increased by 32.0% on a seasonally adjusted basis, following a record level of transaction numbers in June 2021, and the subsequent reduction which followed in July.
The Bank of England’s Money and Credit August 2021 release reported that mortgage approvals for house purchases (an indicator of future lending) in August 2021 was 74,500, which is down from 75,100 in July 2021.
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