Average UK House Price Up 15.5% From Last Year

Ad Banner

Since last year, there has been a 15.5% increase in the average UK house price. This increase is the most significant annual increase since May 2003.

The surge is mainly due to the butterfly effect from when prices dropped last year due to modifications in stamp duty and a backlog of housing transactions during the coronavirus pandemic.

The Office for National Statistics released the UK House Price Index: July 2022, which said that the annual price growth rate has doubled, from 7.8% in June to 15.5% in July.

The annual increases in Wales and England were even more significant, at 17.6% and 16.4% — although there were substantial variations depending on the region of England. London’s house prices lagged by 9.2% compared to the South-West of England, which experienced a 20.7% increase in July.

Subscribe To Our Newsletter

We ask this in order to deliver you a better experience.

How does Stamp Duty & Coronavirus affect the property market?

HMRC said there would be changes made to stamp duty earlier this year, as the HMRC were not satisfied with the successful reclaims and reliefs claimed in the past year.

The modifications, in turn, made some purchases less financially attractive than others; however, now, the straightforward system has balanced this and is welcomed by taxpayers and advisers alike.

Last July, the average UK house price dropped due to the end of the £500,000 stamp duty holiday, which has aided in the surge this month.

In early July 2020, HMRC modified the tax paid on properties in England and Northern Ireland (with similar changes later in the month to Scotland and England).

Properties in England and Northern Ireland will not incur any tax if they cost up to £500,000 (the threshold was £250,000 for Scotland and Wales). The modifications meant that property sellers asked for higher prices, as they understood that the changes reduced the buyers’ total costs.

In early March 2021, there was an extension to the Stamp Duty holiday in England & Northern Ireland – made to end at the end of June 2021.

After this, the stamp duty threshold would drop down to £250,000 until the end of September. At the beginning of October 2021, the Stamp Duty thresholds normalised to the level they were in July 2020.

Due to the exaggerated extension of tax breaks into the end of June 2021, the tax breaks likely inflated March & June’s average house prices because buyers rushed to ensure they completed their property purchases before the extension deadline.

Again, the inflated prices were seen in late September as the tax breaks ended — the increase in prices has since caused a groundbreaking average house price level within the UK of £292,000 in July 2022. Luckily, the house prices have stabilised in 2022 – compared to the volatile market of 2021.

The Office for National Statistics suggests that the coronavirus pandemic has affected the supply of housing transactions, leading to the total number of processed transactions in this month’s price index release, causing higher levels seen throughout the pandemic.

Average UK house price trends

In the last six months of 2020, the UK’s average house price growth grew exponentially. This market trend continued into 2021 and 2022. In June 2022, the average UK house price was £286,000 and then increased to £292,000 in July 2022.

On a non-seasonally adjusted basis, the UK average house price increased by 2% between June & July 2022 — the ninth month of monthly increases. In comparison to the same period the year before, there was a decrease of 4.8%.

Regional UK house price changes

In England, the average house price increased by 9.1% between June 2022 and July 2022. There was an increase of 16.4% over the annual year to July 2022, with the average house price at £312,000.

In Wales, the average house price increased by 8.5% between June 2022 and July 2022. But the annual year price increase was 17.6%, with a record level of £220,000 in July 2022.

Northern Ireland remains the economic UK country to buy a home, with the average property price at £169,000. Scotland also has a relatively low average house price of £193,000, which increased by 1.5% between June 2022 and July 2022.

London, having some of the most expensive average house prices in the UK at £544,000 (July 2022), is beginning to suffer from stagnation. It has the lowest regional annual house price growth rate in the UK at 9.2% in 2022. On the other hand, the South West has had the highest annual house price growth, with average prices of 20.7% in July 2022.

What does this all mean?

We spoke to Jonny Christie, CEO of The Property Buying Company, about his thoughts on the surge in average UK house prices for the property market. Mr Christie said, “Even with the cost-of-living crisis looming over our heads, the UK’s housing market still seems to increase. There seems not to have been a stagnation of housing prices for most of England from June 2022 to July 2022.

Except for London, the average house market increased by less than 10%. This may indicate that the demand for properties in London is slowing compared to areas like the Southwest where the order has increased significantly – with the average house price rising more than double that of London’s.”

 

Want to stay up to date on the latest news?

Subscribe To Our Newsletter

We ask this in order to deliver you a better experience.

Tom is a Digital Content Writer passionate about sustainable property & property trends. Regardless of the subject, he will always write blogs of the best calibre. Read more about Tom here.

Ad Banner
About Tom Condon 125 Articles
Tom is a Digital Content Writer passionate about sustainable property & property trends. Regardless of the subject, he will always write blogs of the best calibre. Read more about Tom here.

Be the first to comment

Leave a Reply

Your email address will not be published.


*