The Office for National Statistics (ONS) has reported that UK house prices increased by 2.5% in the year to August 2020, up from 2.1% in July 2020.
On a non-seasonally adjusted basis, average house prices in the UK increased by 0.7% between July 2020 and August 2020, compared with a rise of 0.3% during the same period a year earlier (July 2019 and August 2019).
There has been an annual price rise of 2.5%, which makes the average property in the UK valued at £239,196
The highest annual growth within the English regions was in the East Midlands where average house prices grew by 3.6%. The lowest annual growth was in the North East, where prices increased by 0.2% in the year to August 2020.
In London house prices have risen by 0.9% since July 2020 and by 3.5% annually taking the average property value to £489,159
The UK HPI is based on completed housing transactions. Typically, a house purchase can take 6 to 8 weeks to reach completion. The price data feeding into the August 2020 UK HPI will mainly reflect those agreements that occurred after the government measures to reduce the spread of Covid-19 took hold.
The UK Property Transactions Statistics showed that in August 2020, on a seasonally adjusted basis, the estimated number of transactions of residential properties with a value of £40,000 or greater was 81,280. This is 16.3% lower than a year ago. Between July 2020 and August 2020, UK transactions increased by 15.6% on a seasonally adjusted basis.
Lucy Pendleton from independent estate agents James Pendleton, said: “This was the moment the market began to catch fire over the summer having emerged from the pandemic in better shape than many predicted. Now, as we enter autumn, the heat still isn’t coming out of this market.
“There’s been some talk lately of what effect the removal of many high LTV mortgages is having on the first-time buyer market which is as much a leading indicator as the all important London market. In the capital, where these two worlds collide, it’s having very little effect. Demand for cheaper properties hasn’t weakened and that’s because the bank of mum and dad is still widely open for business, interest rates remain low and high rents mean it’s still well worth getting on the property ladder.
“As long as mortgage repayments remain cheaper than the cost of rent, demand to buy a first home will continue to show strength, and first-time buyers everywhere are still able to turn to the Help to Buy scheme if they need to.
“We are about to hit a period when the market traditionally slows down. When the clocks change, people switch into hibernation mode and new enquiries begin to soften until the New Year. How much the stamp duty holiday will affect that this year remains to be seen, but this incentive plays a relatively muted role in the capital where prices are highest.”