According to figures from the Office for National Statistics (ONS), yearly house price growth was more than double what was seen in June, when the yearly change was 7.8 per cent.
Industry professionals noted that this was distorted by last year’s stamp duty holiday, as the rush to complete sales in June 2021 before the threshold was lowered resulting in inflated asking and sale prices. This was then followed by a dip in activity the following month.
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “We had a lull in July [2021] where prices fell back month on month and annual rises slowed to 7.1 per cent. We’ll see echoes of this through the next few months, as we get another bump and a dip from the end of the stamp duty holiday in September last year.”
Andrew Montlake, managing director of Coreco, said the reality had been skewed by the stamp duty holiday so the data needed to be taken with a “pinch of salt”.
He added: “The reality is that the property market has been slowly cooling in recent months as the nation is gripped by an unprecedented cost-of-living crisis. We’re also seeing valuers start to get more conservative due to the strong economic headwinds. With more rate rises a nailed-on certainty and the cost of living crisis set to worsen as we enter the winter, the property market will likely see modest price growth between now and the spring.”
Regional and country-level price differences
The South West saw the strongest year-on-year rise in house prices with a 20.7 per cent growth to £330,414. London continued to report the lowest increases in price with a 9.2 per cent annual rise to £543,517.
In terms of home nations, Wales saw the biggest rise in house prices, where average property values increased by 17.6 per cent to £219,951. This was followed by England, where average prices rose by 16.4 per cent to £311,583.
Scotland saw a 9.9 per cent rise to £192,966, while Northern Ireland reported a 9.6 per cent increase to £169,063.
Buyer and property type
Detached houses saw the largest growth in value at £457,552, which was a 17.3 per cent uplift on last year. Flats and maisonettes saw the smallest rise of 9.3 per cent to £234,000.
First-time buyers paid 15.1 per cent more for their homes than they did last year on average, with a typical value of £243,705. Former homeowners paid 16.4 per cent more, with an average price of £342,250.
Confidence restored by energy price cap
Some industry professionals suggested that while the surging cost of living was still having an impact on finances, the certainty of the energy price cap could make prospective buyers feel more confident.
Imran Hussain, director at Harmony Financial Services, said: “Anyone hoping for a massive drop in prices and to snap up a bargain will be in for a shock. Though activity levels have calmed down slightly, demand is still there.
“Curiously, activity may even ramp up again now that everyone knows what’s happening with their utility bills for the next two years.”
Coles said increased costs in other areas may still dampen buyer sentiment, adding: “The fact that we won’t see unspeakable energy price rises in October or January will have come as a relief to millions of people, and may well have eased concerns about rising prices this winter for some buyers. However, there are still very good reasons why it may not be enough to significantly alter predictions of a property market slowdown.
“Even at this level, sky high bills will be a stretch for millions of people, and the relentless rise in the cost of food and other household bills will put us under even more pressure. Meanwhile, if the Bank of England raises rates again next week as expected, it’s going to make higher house prices even less affordable. We can expect the maths to stop adding up for increasing numbers of buyers, and their mortgage lenders, which could dampen price rises.”
