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UK house prices rose by 2.5% over the year to August elevating the average property in the UK to £239,000, data from the Land Registry has revealed.

The latest index, which is based on completed transactions and is published by the Office for National Statistics, offers a picture of the market in the month after the stamp duty holiday was introduced.

It shows average prices were £6,000 higher in August than at the same time in 2019 and highlights the East Midlands as the English region which experienced the highest annual growth with prices rising by 3.6%.

Nicky Stevenson, managing director at estate agents Fine & Country, said: “Here is official confirmation that the market did indeed get up to a canter over the summer months.

“The annual rate of growth soared as buyers frustrated by lockdown and lack of space crammed into the market in search of larger properties. That alone explains this year’s sudden rally, as the stamp duty holiday was only introduced in July.”

Stevenson explained the lag in this data being released would mean any extra demand the stamp duty relief created would not be seen in the Land Registry figures before the end of the year.

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The data also showed UK house prices have risen 0.7% since July 2020. In London prices were still on the rise, increasing by 0.9% since July 2020 and by 3.5% annually taking the average property value to £489,159.

Transactions level with 2019

HMRC data also published today revealed UK residential transactions in September 2020 were at 98,010, which were similar to the September 2019 figures. They were just 0.7% lower than the same month last year and 21.3% higher than August 2020.

Anna Clare Harper, CEO of asset manager SPI Capital and author of Strategic Property Investing, explained transaction data was of interest because it represented a more complete picture than comparable indices.

“What’s interesting about the September 2020 data is that transaction volumes are on a par with transactions in September 2019,” she said.

“This suggests that the temporary changes to stamp duty designed to boost confidence in the housing market have worked well to achieve this goal. There are very few sectors where buyers and sellers feel as confident as they did in September 2019.

“What happens next will be a reflection of policy and economics. Trade bodies such as RICS, as well as government policy makers, will play a significant role in the future of the housing market, as they have in the story that has played out so far in 2020.

“For potential home buyers and investors, the key will be not taking on too much credit, despite the relatively cheap cost of debt at present, as it is very difficult to forecast what will happen next.”

By Kate Saines

Source: Mortgage Finance Gazette

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