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House prices surged in June, but has property price inflation peaked?

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House price growth hit a 17-year high in June but the market is now showing some signs of slowing
House prices surged in June, but has property price inflation peaked?

UK house prices increased by 13.2% in the year to June 2021, up from 9.8% in May 2021, according to the official UK House Price Index from the Office for National Statistics.

This was the highest annual growth rate in 17 years, taking the average price of a UK property in June to £265,668.

House price growth was strongest in the North West where prices increased by a staggering 18.6% in the year to June 2021.

The lowest annual growth was in London, where prices increased by 6.3%.

National growth

At the country level, the largest annual house price growth in the year to June 2021 was recorded in Wales, where house prices increased by 16.7%.

Scotland saw house prices increase by 12.0% in the year to June 2021, while England saw an increase of 13.3%.

Northern Ireland saw house prices increase by 9.0% over the year to Quarter 2 (April to June) 2021.

Paul Stockwell, chief commercial officer at Gatehouse Bank, said: “June became another record breaking month for the property market in terms of annual price growth, but this may represent the year’s highest peak. It was to be expected that the impending stamp duty deadline would create a spike.

“Although prices may not continue to grow as consistently for the remainder of the year, they are likely to hold steady due to the persistent high demand and low supply. Mortgage approvals have started to dip, according to Bank of England data, but they continue to surpass pre-pandemic levels, as people still seek properties which offer more space.

“The UK will see another flurry of sales in September as buyers race to complete their purchases before the final stamp duty savings end on October 1.”

Sarah Coles, personal finance analyst at Hargreaves Lansdown, added: “There are already signs that this boom is slowing. RICS says new buyer demand fell after the end of the stamp duty holiday, while lenders reported small falls in mortgage approvals. But neither of these changes have been particularly striking. Record low mortgage rates continue to support healthy demand, while a shortage of properties for sale will keep prices up.”

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