House price rises surge in race for final stamp duty deadline

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, comments on ONS publication of the House Price Index, which shows house price rises surge in race for final stamp duty deadline.

Key points from the House Price Index:

• Average house prices were up 11.8% in the year to September, up from 10.2% a month earlier.
• The average house price hit a record high of £270,000. Average prices are up £28,000 in a year.
• House prices in London were still the highest in the UK, at£507,000.
• Prices in the North West saw the highest annual growth at 16.8%, while London saw the lowest annual growth of 2.8%.
• Prices in the North East remain the lowest in the country, at an average of £153,000.

Sarah Coles said:

“House prices surged to another record high in September, as the race to complete purchases before the final stamp duty deadline pushed buyers into the market and forced prices up. But even though the race is over, enthusiasm from buyers isn’t entirely exhausted, and with a shortage of properties on the market, we haven’t seen the last of the price rises.

“It was the busiest September for house sales on record. On the one hand, this rush for the deadline defies logic, because at this stage the most people could save in stamp duty was £2,500, but clearly there was a major psychological effect, including from people who had originally hoped to hit the June deadline, and just wanted to be able to salvage something from the horror show of buying this year.

“And while we can expect sales to die back somewhat in October, the same can’t be said of house prices. We would expect house price growth to slow over the coming months, and if we get interest rate rises over the next few months, this could provide even more of a drag on prices. However, we’re still expecting prices to keep rising, because there are so few properties on the market. Buyer numbers are still outstripping sellers, and the number of properties on agents’ books continues to shrink. It means more people chasing fewer properties, which means prices are unlikely to fall in the immediate future.

“It’s more bad news for first time buyers, who have seen average prices rise an eye-watering £28,000 over the past year, pushing properties further and further out of reach.”

Kindly shared by Hargreaves Lansdown

Main photo courtesy of Pixabay