Average UK house price rises to £296,000 despite economic gloom

UK house price growth slowed in August, but was still higher than a year earlier. Photo: Matt Cardy/Getty

UK property prices slowed in August, but growth remained at double digit levels as the property market remained resilient to inflationary pressures and turbulence in the wider UK economy.

New figures released on Wednesday by the Office for National Statistics (ONS) show property prices rose 13.6% year-on-year in August.

That was down from July’s 16%, reflecting how prices in the same month last year were hit by the end of a tax break for homebuyers.

The average cost of a house was £296,000 in August, £36,000 more than a year earlier.

Read more: Stamp duty cut survives Hunt’s ax as mini budget scrapped

James Forrester, chief executive of Barrows and Forrester, said: “While the UK government may be a laughing stock, the UK property market is far from it and continues to move forward at pace despite the chaos that has unfolded across the board. economy.

“A commitment to lower stamp duty will certainly be the icing on the cake for many homebuyers, but it is their continued ability to borrow to buy that will keep the wheels of the housing market turning.

“As things stand, they remain more than capable, with the majority of lenders still offering a strong level of product at rates that remain favorable. With stability returning to gilt markets, we can expect that the mortgage industry is stabilizing after what has been a difficult few weeks and that will ensure the market remains healthy over the coming months.”

Average house prices rose over the year to £316,000 (14.3% annual growth) in England, £220,000 in Wales (14.6%), £195,000 in Scotland ( 9.7%) and £169,000 in Northern Ireland (9.6%). according to the ONS.

London recorded the weakest annual growth in property prices, where average prices rose 8.3% in the year to August, from 10.1% the previous month.

But the capital remains the most expensive region to buy a house, with a record average price of £553,000 during the month.

Prices have risen fastest in the South West of England at 17%, compared to a growth rate of 21.1% in July 2022.

“Property prices rose slightly during the month, with the annual growth rate declining due to strong price increases seen at this time last year as the stamp duty holiday ended,” Matt Corder , deputy director of the awards division at the ONS said.

Meanwhile, rental price growth continued to pick up, led by London, Corded added. Although rental rates still “showed relatively weak growth”, it was the largest increase in six years.

Rents rose to 3.6% in the 12 months to September from 3.4% in August.

Read more: UK inflation returned to double digits as price rises hit 10.1% in September

It comes as the government last month announced stamp duty tax relief for homebuyers as the cost of living rises.

Land Stamp Duty (SDLT) is a lump sum payment you must make when buying property above a certain threshold.

Under plans announced in September as part of the mini budget, no stamp duty has to be paid on the first £250,000 of a property – down from the previous threshold of £125,000.

First-time buyers don’t have to pay stamp duty on the property up to £425,000, up from £300,000.

The value of a property that first-time buyers can claim relief on has also increased, from £500,000 to £625,000.

Watch: Will UK house prices ever drop?

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