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UK house prices saw their biggest monthly rise in more than 14 years in September when the stamp duty rebate ended while the “race for space” drove buyers to look beyond London.
The average house price rose 1.7 percent last month from August, the strongest monthly increase since February 2007, according to data from the Halifax mortgage company.
Compared to the same month last year, house prices rose 7.4 percent, an acceleration of 7.2 percent in the previous month, pushing the average home to just over £ 267,500, the highest level on record.
The September price hike “shows the pandemic boom is still alive,” said Jonathan Hopper, CEO of Garrington Property Finders.
The end of stamp duty in England and the desire among home buyers to close deals quickly may have played a role in these numbers, said Russell Galley, managing director at Halifax.
The rapid rise reflects other factors as most of the mortgages agreed in September would not have been taken out before the tax break expired, he added.
Starting in October, the thresholds below which buyers in England and Northern Ireland can avoid paying stamp duty will decrease from £ 250,000 to £ 125,000, the level prior to July 2020 when the tax exemption was introduced to stimulate the housing market after the first national lockdown . By July 1, the threshold was £ 500,000.
“The ‘space race,’ when people changed their preferences and lifestyles, undoubtedly had a huge impact,” said Galley. The prices for apartments rose by 6.1 percent compared to 8.9 percent for semi-detached houses and 8.8 percent for single-family houses.
Greater London remains the outlier, growing just 1 percent annually, and was again the only region or nation to see a drop in house prices over the last three-month rolling period.
“The driving force [of the price rise] is now old-fashioned market fundamentals and the chronic imbalance of supply and demand, ”said Hopper.