The average UK property prices reached a record high in August of £262,954, according to Halifax Building Society.

That figure is more than £23,600 greater than when the property sector was starting to reopen in June 2020 following the pandemic restrictions.

UK annual house price inflation slowed to a five-month low of 7.1% last month, the company added.

Russell Galley, managing director of the building society, said: “Given the rapid gains seen over the past 12 months, August’s rise was relatively modest and the annual rate of house price inflation continued to slow, hitting a five-month low of 7.1% (versus 7.6% in July).

“However, compared to June 2020, when the housing market began to reopen from the first lockdown, prices remain more than £23,600 higher (or 9.9%).

“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.

“However, while such Government schemes have provided vital stimulus, there have also been other significant drivers of house price inflation.

“We believe structural factors have driven record levels of buyer activity – such as the demand for more space amid greater home-working.

“These trends look set to persist and the price gains made since the start of the pandemic are unlikely to be reversed once the remaining tax break (in England and Northern Ireland) comes to an end later this month.”

He added: “Market strength has not run its course and we are finding pent-up demand is alive and well, resulting in plenty of transactions, albeit at a lower level than we saw a few months ago.”

 

Regional differences

The average house prices and annual price growth in August, according to Halifax, are as follows:

 

– East Midlands, £218,112, 8.7%

– Eastern England, £306,169, 7.3%

– London, £508,503, 1.3%

– North East, £154,629, 8.0%

– North West, £201,143, 9.5%

– Northern Ireland, £165,032, 9.3%

– Scotland, £185,953, 8.4%

– South East, £356,742, 6.8%

– South West, £272,719, 9.6%

– Wales, £192,928, 11.6%

– West Midlands, £222,830, 7.4%

– Yorkshire and the Humber, £184,918, 9.1%

 

 

Price trends

The Building Society’s report follows news that UK property prices jumped in June at the fastest pace since 2004, according to official data, as buyers hurried to finalise purchases ahead of the winding down of the stamp duty break.  They since slowed last month.

Last week, the Nationwide building society said its data showed house prices jumped by 2.1% in August, a jump of almost £5,000, and annual inflation picked up to 11% from 10.5%, beating expectations that the market would cool after the threshold for paying stamp duty was reduced from £500,000 to £250,000 in July.

 

UK’s least affordable location

Winchester has become the least affordable city in Britain to purchase a property, with prices at an average of 14 times of most people’s earnings.

The Hampshire city has overtaken Oxford, according to figures. A home in Winchester will cost an average £630,432 – the highest in the UK and up 8% on 2020, while average earnings are £45,059.