The average UK house price has surged by £20,000 in the space of a year.
House prices increased by 8.6% over the year to February, marking the highest annual rate of growth since October 2014, the Office for National Statistics (ONS) said.
The average UK house price was £250,000 in February 2021, which was £20,000 higher than in February 2020, it added.
Average house prices increased over the year in England to £268,000 (an 8.7% increase), in Wales to £180,000 (8.4%), in Scotland to £162,000 (8.0%) and in Northern Ireland to £148,000 (5.3%).
The North West was the English region with the highest annual growth in average house prices (11.9%), while London recorded the lowest (4.6%).
London’s average house price remained the most expensive of any region in the UK at an average of £496,000 in February.
The North East continued to have the lowest average house price of any English region at £138,000. Although house prices in the North East surpassed a pre-economic downturn peak previously reached in July 2007 in December 2020, they have now fallen back again below this level, the ONS said.
The report cautioned that because of the impact of coronavirus on house sales, there may be increased volatility in the latest estimates, particularly in areas where transaction volumes were smaller. There might be bigger revisions needed than usual, it added.
The figures were released as HM Revenue and Customs (HMRC) said that house sales in March 2021 were around double the number seen in March 2020.
HMRC said an estimated 190,980 sales took place in March 2021, marking a 102.3% increase in transactions compared with 94,380 transactions in March 2020 and around a third (32.2%) higher than in February 2021.
In the recent Budget, a temporary stamp duty holiday in England and Northern Ireland was extended in its current form from the end of March 2021 to June 30 2021.
From July 1 2021, the “nil rate” stamp duty band will reduce from £500,000 to £250,000 until September 30 2021 before reverting to £125,000 from October 1 2021.
An equivalent holiday in Scotland ended on March 31 2021.
In Wales, a property tax holiday there was extended to June 30 2021.
Nitesh Patel, strategic economist at Yorkshire Building Society, said: “Available properties appear to be getting snapped up quickly, adding upward pressure on prices.
“Buying behaviour continues to be dominated by the pursuit for space, with detached homes rising by 9.1% in the year to February 2021, in contrast with flats and maisonettes, which saw a 6.7% increase over the same period.
“With the stamp duty relief in place in its current form until the end of June, and the jobs market fairly resilient, we don’t expect the housing market dynamics to change anytime soon. As a result, we expect price momentum to continue for a few more months.
“However, the jobs support scheme concludes in September and prices rising at a faster pace than salaries means affordability will become an issue for some buyers – so at this point, we are likely to see housing market activity cool.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Transactions are always a surer sign of the health of the housing market than house prices and a surge in activity in March shows that people continue to hunt for more space, while taking advantage of the stamp duty holiday and cheap mortgages.”
Mike Scott, chief analyst at estate agency Yopa, said: “These figures largely relate to home sales and purchases that were agreed when the stamp duty holiday was still expected to end on March 31, and so they have been boosted by buyers rushing to beat that deadline and avoid paying stamp duty.”
He added: “There are many other factors that will continue to push up prices this year, including: shortages of homes for sale, big increases in average household savings over the past year, people’s new property needs in the post-pandemic world, Government backing for 95% mortgages, and a general mood for a fresh start in life after the lockdowns finally come to an end.”
Sam Mitchell, chief executive of online estate agent Strike, said: “Combined with growing optimism due to the vaccination rollout, and the desire for a fresh start in fresh surroundings, and it’s likely to be a hot summer for Britain’s property market.”
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