London and UK house prices fall by £10,000 as stamp duty holiday tapered
For the eighth consecutive month the capital is the region with the lowest annual growth
The average price for a property in London in July 2021 was £494,673, according to the latest index by the Office for National Statistics (ONS).
This was a £9,999 fall (2%) from the £504,672 average in June 2021 - the final month for home buyers in England and Northern Ireland to take full advantage of the stamp duty holiday.
According to the ONS data, London’s average house prices remain the most expensive of any region in the UK. However, the capital also continues to be the region with the lowest annual growth for the eighth consecutive month. Average prices in London increased by 2.2% over the year to July 2021, down from 5.1% in June 2021.
Average price by property type for London
|Property type||July 2021||July 2020||Difference %|
UK average down by £9,913 after record high
The average house price across the UK fell by £9,913 between June and July. Although £19,000 higher than this time last year, the UK average house price in July was £255,535 - down from the record high of £265,448 in June.
In England, the July data shows on average, house prices have fallen by 4.5% since June 2021. The annual price rise of 7% takes the average property value to £270,973. Wales shows, on average, house prices have fallen by 4% since June 2021. An annual price rise of 11.6% takes the average property value to £187,960. In Scotland average house prices increased to £177,000 (14.6%) and in Northern Ireland to £153,000 (9%).
What the experts said
Sam Beckett, ONS head of economic statistics: “The growth in house prices slowed substantially across all nations and regions, after the stamp duty holiday on more expensive properties came to an end, with the number of transactions also at historically low levels. While rental prices are growing across much of the country, they continue to be weak in London and are now falling at their highest rate in a decade.”
James Forrester, managing director of Barrows and Forrester: “A prolonged period of property panic buying spurred by the chance of a stamp duty saving has seen UK homebuyers essentially clear the shelves over the last year. So a natural market adjustment is always going to occur in the run-up to each of the staggered deadlines. However, the proof in the pudding is yet another strong annual rate of growth and the reality is that there has been no let-up in demand, while available stock also remains scarce. So where the long-term health of the market is concerned, we are yet to see any signs of a wobble.”
Marc von Grundherr, director of Benham and Reeves: “While there is no snooze button this time around where the stamp duty deadline is concerned, the end of this government tax reprieve is unlikely to act as a pothole in the property market’s road to recovery. A certain level of natural realignment is to be expected but those who judge the market on such an erratic, short term metric as monthly house price growth are ill-advised to do so. We’re now heading into what is traditionally one of the busiest times of the year and we expect buyer demand to remain consistently high throughout. We also expect the return of foreign buyer demand to further boost the UK housing market over the coming months, with London, in particular, seeing a sharp increase in market activity and house price growth.”
Colby Short, founder and CEO of GetAgent.co.uk: “Before we run for the hills at the first sight of a house price decline it’s important to note that the market has been moving at a record pace for a sustained period of time and so a pause for breath is more than natural. We know the stamp duty holiday has had an incredible impact and so a monthly decline following both deadlines is to be expected. However, market sentiment is still extremely high and while mortgage affordability remains at record lows, the housing market will continue to blossom well into autumn and beyond.”
Guy Gittins, CEO of Chestertons: “Activity levels in July didn’t drop as much as originally expected with the number of newly agreed sales being very close to May and June figures. Since the easing of lockdown restrictions, buyers have been eager to take control of their lives again and a big part of this is to find a property and location to call home.”
Nick Barnes, head of research at Chestertons: “After a record-setting first half of the year, the housing market has been levelling out since June but remains buoyant. Although the impact of the Stamp Duty holiday has weakened and August is traditionally a quieter month, the London market registered a 54% increase in sales compared to July. We expect activity to pick up as we move into the autumn as there is still substantial unsatisfied demand. Buyers are especially looking for larger properties with gardens and are still able to take advantage of very attractive mortgage offerings.”