House Price Growth in the UK
According to the latest Nationwide House Price Index, in July 2021 house price growth picked up, increasing from 10.5% in July to 11% in August.
Data shows that the average house price in the UK was up by 2.1% in July which is the second largest month on month gain since 2006 and a big change from the 0.6% dip that was recorded between June and July this year.
Figures show that house prices are now around 13% higher than in March 2020 when the pandemic started.
This bounce back in house prices is a surprise for many industry experts, given that it was believed the end of the stamp duty holiday would cause a cooling of the housing market. Instead, the monthly increase has been substantial.
Lack of supply is likely to be the driver behind the house price increase with record low numbers of available properties coupled with a record high number of people looking to purchase a home. This demand is likely to continue for the near term and with borrowing costs currently still low, it could continue for some time. As we near the winter months from the end of September, activity could slow down especially if we see an increase in unemployment when the government support winds down.
For buyers with equity in their homes or first-time-buyers with large deposits, there are some very attractive incentives which are fuelling demand – for example, interest rates available and several lenders have introduced fixed-term mortgage rates with an interest rate below 1%.
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