House prices hit a record high in the annual pace of growth in property values slowed, according to the UK’s largest mortgage lender
Halifax said that the cost of a typical house in the UK rose 0.7% last month to the cost of £262,954.
In the year leading up to August, house prices rose 7.1%, it said, down from a rate of 7.6% back in July.
But that figure masked the big differences between the UK’s nations and regions, reflecting buyers’ interests in seeking both more space, and rural locations.
“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,” said Russell Galley, managing director, Halifax, which is part of Lloyds Banking Group.
This comes after industries from pig farming, to fast food restaurants have said that the lack of skilled staff members is disrupting their business. The CBI have said that the staff shortages would harm the UK’s economic recovery following the coronavirus pandemic.
He said that the broader economic environment was positive, with high job vacancies and consumer confidence returning, which benefited the housing market.
But the stamp duty holiday that was put in place at the start of the coronavirus pandemic in order to support the housing market, runs out at the end of September, and was no longer having a significant impact upon the market, Mr Galley also added.
Instead, record levels of buyer activity was being driven by homebuyers’ demand for more space as many continued to work from home.
“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 comes to an end later this month,” said Mr Galley.
Nationwide provided a stronger set of housing market figures earlier this month, reporting that house prices in the UK had risen by 2.1% in August compared to the previous month, taking price rises over the last year to up s further 11%.
The pace of price rises varied throughout the UK, the Halifax said. In Wales, annual house price inflation was 11.6% last month, while within the south west of England it was at 9.6%.
Northern Ireland saw annual house price inflation of 9.3%, but in Scotland, the price growth slowed to 8.4%.
This comes after Boris Johnson is facing disputes with members of his own party over his plans to raise national insurance contributions (NI) of 25 million workers in the UK to raise £10bn to pay for social care for the elderly.
House prices within Greater London rose just 1.3% over the past year, the Halifax has said. However at £508,503, a typical property in the nation’s capital was still much more expensive than anywhere else in the UK.
There were “plenty of props” currently for the UK housing market, said Martin Beck, the EY Item Club senior economic adviser.
“Consumer confidence has remained high, the labour market is emerging from the crisis relatively unscathed, and buyers have continued to benefit from ultra-low mortgage rates,” said Mr Beck.
In addition, many households in the country had managed to accumulate “substantial savings” during lockdowns.