London Lags Behind While UK House Prices Keep Soaring

UK house prices rose by 7.1 per cent in the year to August, according to the latest figures from Halifax.

The Halifax House Price Index for August revealed a 0.7 per cent increase in the average UK house price to a record high of £262,854. The quarterly increase was 1.2 per cent. However, the annual rate of growth slowed from July’s 7.6 per cent figure, a finding Halifax said was evidence of a cooling in the market.

Halifax managing director Russell Galley said that while the stimulus provided by the stamp duty holiday is abating, other “structural” factors such as a lack of supply and the economic recovery should continue to push prices up.

“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,” he noted.

However, those enlisting the help of London property experts to invest in the capital might note that one of the most persistent trends, which remains a feature of the latest findings, is that London is lagging behind the rest of the market, with annual price inflation of 1.3 per cent. The highest price increases came in Wales at 11.6 per cent, followed by South West England at 9.6 per cent.

This may be closely related to another structural factor mentioned by Mr Galley in his comments, the “demand for more space amid greater home working” in the pandemic. That factor would constrain property demand in densely-populated London, while boosting Wales and the south-west, which, Halifax noted, benefit from offering plenty of rural living opportunities.

New data from Pocket Living highlighted by the Evening Standard has suggested some areas of London may still prove popular even in these circumstances.

Hillingdon and Havering have been identified in its index as offering the best combination for house prices and price growth, council tax rates and access to green space.

Both boroughs lie in the outer suburbs near the green belt and Hillingdon will benefit from having five Crossrail stations when the Elizabeth Line opens next year.