LONDON: British house prices rose 0.7 per cent in August, taking the average cost of a typical home to a record high of £262,954, however the rate of growth slowed.
The monthly rise - the biggest since May - followed a 0.4 per cent rise in July, however the annual rate of house price inflation continued to slow, hitting a five-month low of 7.1 per cent, versus 7.6 per cent in July, according to the Halifax House Price Index, report agencies.
“However, compared to June 2020, when the housing market began to reopen from the first lockdown, prices remain more than £23,600 higher,” said Mr Galley.
The slowing market reflects the tapering of the stamp duty holiday, with the tax incentive programme introduced by Chancellor of the Exchequer Rishi Sunak in July last year - which delivered a saving of £15,000 on the first £500,000 of any property purchase in England or Northern Ireland - ending on June 30.
A £250,000 tax-free allowance will expire on September 30 in England and Northern Ireland.
“Much of the impact from the stamp duty holiday has now left the market, as highlighted by the drop in industry transaction numbers compared to a year ago,” said Mr Galley.
However, while Mr Galley acknowledged the scheme provided vital stimulus for the market, there have also been other significant drivers of house price inflation, such as the demand for more space amid the work-from-home boom.
He also pointed to the improving macroeconomic environment with job vacancies at a record high and consumer and business confidence returning to pre-pandemic levels.
“Coupled with a supply of properties for sale that looks increasingly tight, and barring any reimposition of lockdown measures or a significant increase in unemployment as job support schemes are unwound later this year, these factors should continue to support prices in the near-term,” said Mr Galley.
British mortgage approvals dropped in July on the previous month when buyers were rushing to complete deals to beat the stamp duty holiday deadline, with consumers making a “rare” net repayment on home loans, according to the Bank of England.
British lenders approved 75,152 loans in July, a drop of 6.4 per cent from the 80,272 recorded in June – the lowest level in a year.
Annual house price inflation is slowing in most nations and regions, according to Halifax, with Wales the strongest performing area with an annual increase of 11.6 per cent - the only double-digit rise recorded in the UK during August.
However, Greater London continues to lag the rest of the country, registering just a 1.3 per cent annual increase in prices in August and, over the latest rolling three-monthly period, was the only region or nation to record a fall in prices of 0.3 per cent.
The year-on-year rise in London was also the weakest seen in 18 months, though at a cost of £508,503, average properties in the capital remain far above the national average price.