UK house prices have risen 8% over the past year but the market is showing signs of slowing down, according to official figures.
HM Land Registry data reveals the average UK house price was £256,00 in July – £19,000 higher than it was this time last year.
But this is below June’s record high of £265,000, achieved on the back of a 13.1% increase in prices.
A slowing market
On a seasonally adjusted basis, average UK house prices fell 4.4% between June and July 2021, following an increase of 4.5% in the previous month.
However, Sarah Coles, personal finance analyst at Hargreaves Lansdown, believes the market has just paused for breath after the “distorting effect” of the stamp duty holiday.
“There are no signs of imminent deflation, because the race for space, rock-bottom mortgage rates and the welcome return of first-time buyers are continuing to breathe life into the market,” she said.
While Coles doesn’t expect the pace of sales and price rises to pick up again in the immediate future, it’s not likely to come to a dead stop, either.
“Many of those who were keen to move held back because they couldn’t find anything on the market, and they didn’t want to get embroiled in a bidding war,” she said.
Therefore, a slightly slower backdrop could be beneficial. “In a less frenetic market they have more freedom to find the right property for their needs,” she added.
The Land Registry data showed average house prices in England increased over the year to £271,000 (7%), down from an increase of 13.2% in the year to June 2021.
In Wales, the average house now costs £188,000 after an 11.6% rise over the past year. However, this rate is below the 17% increase recorded in June 2021.
The average house price in Scotland increased by 14.6% over the year to July 2021, to a record level of £177,000. This is up from an increase of 11.8% in the year to June 2021.
In Northern Ireland, average house prices rose 9% over the year to the second quarter of 2021 (April to June). It remains the cheapest UK country in which to purchase a property, with the average house costing £153,000.
North-East growing fastest
The North-East experienced the highest annual house price growth of any UK region, increasing by 10.8% in the year to July 2021, even though this was down from 15.8% in June 2021.
The lowest annual growth of 2.2% was recorded by London, down from 5.1% in June, according to the data.
However, London’s average house price stands at £495,000, which is still the most expensive region in the UK. The North-East, meanwhile, has the lowest average house price at £145,000.