UK house prices surge at fastest monthly rate since 2007 as stamp duty holiday ends
Cheap mortgage deals and a ‘race for space’ helped to drive property market higher, says Halifax
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Your support makes all the difference.UK house prices jumped in September at their fastest monthly rate since February 2007 as buyers continued to "race for space", according to Halifax.
The bank’s data showed that the average sale price of a home rose £4,400 to a new record high of £267,587.
Property values were up 1.7 per cent in the month and 7.4 per cent in the year to September. The price of detached homes was up 8.8 per cent, or £41,000, over the year.
Halifax said that a stamp duty holiday which began to taper in July before ending in October was one of a number of factors that has pushed prices up.
The tax cut has attracted criticism for fuelling a property boom which has made homes less affordable.
Low borrowing costs and a desire for larger properties also caused average sale prices to rise, Halifax said.
The bank expects prices to be supported into next year by a continued lack of supply. Estate agents have reported a further reduction in the supply of homes coming up for sale since the stamp duty holiday began to taper.
"The 'race for space' as people changed their preferences and lifestyle choices undoubtedly had a major impact," said Russell Galley, managing director of Halifax.
"Looking at price changes over the past year, prices for flats are up just 6.1 per cent, compared to 8.9 per cent for semi-detached properties and 8.8 per cent for detached.
"This translates into cash increases for detached properties of nearly £41,000 compared to just £6,640 for flats.
"Against a backdrop of rising pressures on the cost of living and impending increases in taxes, demand might be expected to soften in the months ahead, with some industry measures already indicating lower levels of buyer activity.
"Nevertheless, low borrowing costs and improving labour market prospects for those already in employment are likely to continue to provide support."
Martin Beck, senior economic adviser to the EY Item Club, was more cautious about the outlook for prices.
“Headwinds to further house price growth are increasing,” he said. “Households’ spending power faces both a rising cost of living and the increase in personal taxation due next April.
“The weaker outlook for incomes means housing affordability, on measures such as the ratio of prices to incomes, will look ever more stretched.”
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