UK house prices continue rise but at a slower rate

London prices appear to be trailing other areas of the country

UK house prices rose to another record high in August although the rate of growth appears to slowing down.

Growth came in at 0.7% last month, meaning prices are now up by 7.1% compared to the same point last year, according to the Halifax House Price Index.

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However, compared to year-to-date figures recorded in July (7.6%) and June (8.7%), it represents a fall, meaning that the rate of growth is beginning to slow.

London prices appear to be trailing other areas of the country, with an annual price increase of 1.3%. This compares to growth in Wales in the double digits and 6.8% over the south east.

The gradual conclusion of the stamp duty holiday resulted in sales levels falling by 62% in July, as the market took a breather from what was a hectic period during the pandemic.

Joshua Raymond, Director at financial brokerage XTB, commented on the figures:

“The Halifax House Price Index (UK’s longest running monthly house price series) came in below expectations at 0,7% compared to the expected increase of 1.1%. Prices have been under increasing pressure after the index showed significant signs of slowdown in the last couple of months after a fairly stable increase throughout Q2,” Raymond said.

“As overall inflation pressures continue to be a key issue followed by the Bank of England, along with other central banks, a continuation of the current trends could see the central bank stepping in and taking action even sooner than was previously expected. While a return to work and easing of lockdowns was expected to significantly boost property prices, it seems as if there are still some major hurdles the UK economy has to contend with.”

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