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Sharp rise in house prices in September

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September saw the strongest rate of monthly growth since 2007, as average property prices reached an all-time high
Sharp rise in house prices in September

UK house prices rose by £4,400 to a record high of £267,587 between August and September, up 1.7% over the month, according to Halifax.

This is the strongest rate of monthly growth since February 2007 and has pushed annual house price inflation to 7.4% from 7.2 in August.

Russell Galley, managing director of Halifax, said: “While the end of the stamp duty holiday in England – and a desire amongst homebuyers to close deals at speed – may have played some part in these figures, it’s important to remember that most mortgages agreed in September would not have completed before the tax break expired. This shows that multiple factors have played a significant role in house price developments during the pandemic.

“The ‘race-for-space’ as people changed their preferences and lifestyle choices undoubtedly had a major impact. Looking at price changes over the past year, prices for flats are up just 6.1%, compared to 8.9% for semi-detached properties and 8.8% for detached. This translates into cash increases for detached properties of nearly £41,000 compared to just £6,640 for flats.”

Karthik Srivats, co-founder of mortgage lender Ahauz, added: “It’s been a frenetic time in the housing market and this data shows things have not got any easier for first-time buyers.

“The tail end of the stamp duty holiday has seen a bump in house prices after a period in which the pace of annual growth appeared to be slowing slightly.

“Growth in prices continues to outstrip wages and raising a deposit the old-fashioned way through patient savings remains an unrealistic dream for most. With the cost of living going up and an upcoming increase in taxes, first time buyers across the country are craving for any kind of support to get on the property ladder.

“One piece of good news is that first time buyers now have sole access to stamp duty relief on purchases up to £300,000 which may give them a slight edge going forward.

“Looking ahead, while many are still forecasting more modest gains later in the year, it really is a case of, believe it when you see it.”

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