The annual rate of growth in UK house prices hit a 19-year high of 15.5% in July, official figures show, with a typical house having £39,000 added to its value in 12 months .
However, commentators have pointed out that the annual rate of price growth has been pushed artificially high because in July 2021 prices fell in response to the end of the most generous period of the duty waiver. of last year’s stamp.
The Office for National Statistics (ONS), which released the data, said the sudden doubling in the annual rate of price growth – from 7.8% in June to 15.5% in July – “was mainly due to a base effect of falling prices. seen at this time last year following changes in the stamp duty holiday’.
Jonathan Hopper, managing director of Garrington Property Finders, said the big jump was “first and foremost a statistical anomaly”.
Annual increases in England and Wales were even larger, at 16.4% and 17.6% respectively, although these strong regional variations are masked: in the South West of England, annual growth prices reached 20.7% in July, while in London it was 9.2%.
Scotland and Northern Ireland were below the UK average at 9.9% and 9.6% respectively.
The stamp duty holiday meant that until June 30, 2021, the first £500,000 spent on a property was tax free for buyers in England and Northern Ireland. The tax relief was later reduced, with the threshold lowered to £250,000. It returned to its pre-pandemic level of £125,000 on October 1, 2021.
The ONS said the 15.5% figure for July was the highest annual rate of house price inflation in the UK since May 2003. It added that the average house price in the UK was £292,000 in July, “£39,000 more than at this time last year. ”.
Hopper said: “Those who are nervous may want to look away from the official house price data in the months ahead as we are in for a roller coaster ride.”
Sarah Coles, senior personal finance analyst at investment firm Hargreaves Lansdown, said the doubling in the rate of price growth was “not what it seems”, adding: “It doesn’t affect the outlook. of the market, which is facing real challenges.”
The ONS said Northern Ireland remained the cheapest UK country to buy property, with an average house price of £169,000.