Annual house price growth rate is currently 13.4%
UK house prices are rising at the highest annual rate since 2004, according to figures released by Nationwide.
The average UK house price rose month-on-month in June, rising by 0.7% compared to May. This means that the annual growth rate has reached 13.4%, which is the highest annual growth rate in about 17 years.
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Robert Gardner, chief economist at Nationwide, said prices were near record highs relative to average incomes, making it more difficult for first-time buyers.
“With another month to go, house prices will rise further. This is not surprising as many home buyers will be rushing to complete their home purchase before the end of the stamp duty holiday,” Nationwide said. Commenting on the price index, Danny Hewson, financial analyst at AJ Bell, said:
“Many factors are at play here. Low interest rates and the availability of low deposit deals have accelerated price increases, even as they affect the national economy in the midst of a pandemic. There is no doubt about it.”
“But this pandemic has also stimulated the market and changed our preferences. What was at the top of people’s wish lists two years ago was the ability to work from home indefinitely, or at least on a part-time basis. will become a distant memory with the potential for spin-outs, expanding the geographical map for many and adding a home office to the list of demands,” Mr Hewson said.
Hewson believes this change is unlikely to be reversed and expects the market to remain “strong” in the coming months. “The X factor will be unemployment. How many people will still have a job after the furlough scheme ends? How many days can they take off on their mortgage to sell quickly? If support ends, the coming months will be difficult for many people. There’s no getting away from the fact that it’s going to be difficult,” Hewson said.
Last summer, Rishi Sunak cut stamp duty on property purchases in a bid to reverse the slump in property sales at the start of the pandemic. In March, Mr Sunak extended the tax cuts until the end of June.
