The average UK property price hit £262,954 in August, said Halifax, it’s highest ever level.

The lender said that house prices grew by 0.7% in August and the annual rate of change fell back slightly to 7.1%, from 7.6% in July.

Wales is the strongest performing area, with annual house price inflation at 11.6% and the only double-digit rise recorded in the UK during August. The South West is also still experiencing strong growth at 9.6%, likely reflecting the ongoing demand for rural living within the region.

London lags

Greater London continues to lag the rest of the country, with just a 1.3% annual increase in prices in August and, over the latest rolling three-monthly period, it was the only region or nation to record a fall in prices (-0.3%).

Russell Galley, managing director of Halifax, said: “Much of the impact from the stamp duty holiday has now left the market, as highlighted by the drop in industry transaction numbers compared to a year ago. However, while such Government schemes have provided vital stimulus, there have also been other significant drivers of house price inflation.

“We believe structural factors have driven record levels of buyer activity – such as the demand for more space amid greater home working. 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.

“Moreover, the macroeconomic environment is becoming increasingly positive, with job vacancies at a record high and consumer confidence returning to pre-pandemic levels. Coupled with a supply of properties for sale that looks increasingly tight, and barring any reimposition of lockdown measures or a significant increase in unemployment as job support schemes are unwound later this year, these factors should continue to support prices in the near-term.”

George Franks, co-founder of estate agents, Radstock Property, added: “After the past year, prices hitting a record high feels like a broken record, but in reality the cooldown has now begun.

“Prices couldn’t keep growing at the giddy levels of the past 12 months so we should welcome the annual fall in price growth, not fear it.

“The effects of the Stamp Duty holiday are now behind us but the impact of the pandemic on housing preferences is still only beginning. What people want out of their homes has changed irreversibly and this recalibration will take many years.

“Even though house price growth will continue to cool, demand is not going to disappear. Mortgage rates are simply too low and supply too weak for that to happen.”