House price growth hits 10.6% in August: UK HPI

Average house prices increased by 10.6% over the year to August, up from 8.5% in July, according to the latest UK House Price Index from the Land Registry and the ONS.

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Rozi Jones
20th October 2021
House sale sign sold
"Yet further proof that the drop in property prices following the initial stamp duty holiday deadline was merely a pause for breath in an otherwise marathon run of positive market momentum."

The average UK house price stood at £264,000 in August, which is £25,000 higher than this time last year.

Average house prices increased over the year by 9.8% in England, 12.5% in Wales, 16.9% in Scotland, and 9.0% in Northern Ireland.

The North East was the region with the highest annual house price growth, with average prices increasing by 13.3% in the year to August 2021.

London continues to be the region with the lowest annual growth (7.5%) for the ninth consecutive month. However, this represents the strongest annual growth in London since August 2016.

Director of Benham and Reeves, Marc von Grundherr, commented: “Yet further proof that the drop in property prices following the initial stamp duty holiday deadline was merely a pause for breath in an otherwise marathon run of positive market momentum.

"There’s little sign of this letting up and should an increase in interest rates materialise, the likelihood is that it will be fairly palatable for the average homebuyer. Therefore, we don’t expect it to have any notable impact on the nation’s insatiable appetite for homeownership and the market should continue moving forward at pace well into next year.”

Managing director of Barrows and Forrester, James Forrester, said: “The current state of the market is quite remarkable given what we’ve been through as a nation since the start of last year. Employment and wage growth have remained firm, mortgage affordability is still hovering around record lows and house prices continue to climb ever higher.

"As a result, buyers continue to mob the market and while an interest rate hike is on the horizon, we expect these factors to continue to stimulate positive house price growth for the remainder of the year.

"Forget about a shortage of HGV drivers, we need more estate agents to get us through until Christmas.”

Rob Barnard, director of intermediaries at Masthaven Bank, added: “The continued ‘race for space’ created by the pandemic has continued to drive up house prices, with the tapering of stamp duty relief over the past year hardly slowing momentum down. While booming levels of buyer activity are certainly encouraging, it is difficult to know if they will last. The end of the government support schemes, as well as expected tax hikes in the new year, could serve to weaken demand going forward.

“Indeed, the country’s economic outlook over the coming winter looks uncertain, from rising inflation to extensive supply chain issues. Amid this backdrop, borrowers will require the guidance of specialist lenders now more than ever to ensure they can get on the housing ladder. Prospective buyers struggling to buy a home, or those who have seen their financial circumstances take a knock over the past 18 months, will need the advice and personalised products which specialist lenders can provide. It will be vital that specialist lenders continue to innovate and develop tailored products and collaborate with brokers to understand the unique and shifting needs of customers.”

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