Property Prices Rise Again

UK house prices rose by 2.5% in the year to August 2020.

This is according to the latest findings by the Office for National Statistics (ONS). The increase was higher than the 2.1% rise in the year to July 2020.

Houses were also 0.7% higher in August than they were in June.

Regional differences

The price rise puts the average house in England at £256,109. The average in Wales stands at £172,828, while Scotland’s average is £155,191. Northern Ireland’s average house now costs £141,131.

Every region in the UK saw house price growth in the year to August. The biggest rise was recorded in the East Midlands, where the price of property went up by 3.6%, putting the average home at £202,345.

London and the North West saw the second highest rise, at 3.5%. This led to the average property costing £438,159 in the capital and £173,617 further north.

The smallest annual rise was seen in the North East, where prices increased by 0.2%. The region also saw no monthly growth, keeping the cost of the average home stable at £131,701.

Property types

In the year to August 2020, semi-detached houses saw the highest price rises. In that 12-month period, they rose 4.1%, from £221,347 to £230,455.

Flats and maisonettes were the only types of property to see a fall in value. The average price of these homes in the UK fell by 0.5%, going from £204,645 in August 2019 to £203,708 a year later.

Terraced houses remained the cheapest, despite an average price increase of 2.4%. They went from £190,139 in 2019 to £194,611 in 2020.

The ONS also found that cost of buying a new-build home rose by 5.3% in the year to June 2020. The average for a new home was £293,356. Meanwhile, existing homes saw a price increase of 2.5% in that period, rising to £232,746 on average.

Sales still low

According to the ONS, house price growth has been generally slow since 2016, “but has picked up this year”.

The organisation said: “Over the past three years, there has been a general slowdown in UK house price growth, driven mainly by a slowdown in the south and east of England.

“The beginning of 2020 saw a pick-up in annual growth in the housing market before the coronavirus (COVID-19) restrictions were put in place at the end of March 2020.”

Despite property sales being given the go-ahead to resume, the number of transactions recorded in June 2020 remained lower than in previous years. That month, 39,170 homes were sold in England, compared to 69,001 in June 2019.

Rental prices rise

It wasn’t just sale prices that rose in the UK in the last few months. Private rental prices increased by 1.5% in the year to September 2020.

England and Wales both recorded growth of 1.5%, while rents in Scotland rose by 0.6%. Northern Ireland saw the highest increase, at 2.4%.

Again, the East Midlands saw the highest rise in England. Tenants in the region had to pay 2.6% more this year than they did last year. The South West saw the second highest rise in rents, at 2.4%.

The lowest growth in prices was recorded in the South East, where tenants paid 1% more over the 12 months to September. Meanwhile, London saw the cost of renting increase by 1.2%.

The future

Analysts have largely predicted that the current house price boom will be relatively short-lived. The end of the temporary cut to Stamp Duty and the closure of financial support schemes from the government is expected to cause growth to slow down.

In Wales, a more immediate impact is about to take place. The country is about to enter a two-week lockdown, putting an end to most housing market transactions.

Estate agents must close on 23 October and viewings must be suspended until 9 November. House moves that can’t wait can still go ahead, but the majority of sales will be delayed.

If you’re looking to complete a house purchase, First4Lawyers’ experts can help with your conveyancing needs. To find out how, just give us a call, request a call back or get an instant conveyancing quote online.