• Kevin Murphy

UK House Prices

Updated: Mar 24

The Office of National Statistics has released the UK House Price Index: January 2021

UK House Prices increased 7.5% over the year to January 2021 with a decrease from 8.0% in December 2020.

The ONS is reporting that average house prices increased however over the year in England to £267,000 (7.5%), in Wales to £179,000 (9.6%), in Scotland to £164,000 (6.9%) and in Northern Ireland to £148,000 (5.3%). The report states:

"Because of the impact of the coronavirus (COVID-19) pandemic on both the number and supply of housing transactions, we might see larger revisions to the published House Price Index (HPI) estimates than usual. Fewer transactions are available than expected for the January 2021 estimate. As a result, there may be increased volatility in this month’s estimates, particularly at the lower geographical levels where transaction volumes are smaller. We are looking at options to improve this, including working with data suppliers."

A slowdown over the past four years the UK home price growth as a result of prices growth slowing in the south and east of England. Factors as pent up demand and changes in home preferences due to the pandemic have effected home purchase transactions.

The ONS report:

"Changes in the tax paid on housing transactions may have allowed sellers to request higher prices as the buyers' overall costs are reduced. On 8 July 2020, the Chancellor of the Exchequer announced a suspension of the tax paid on property purchases with immediate effect in England and Northern Ireland. The suspension came into effect on 15 July in Scotland and 27 July in Wales. In England and Northern Ireland, properties up to the value of £500,000 would incur no tax, while the thresholds for Scotland and Wales were £250,000. The tax holiday for Scotland is due to end on 31 March 2021. The tax holiday has been extended until 30 June 2021 in Wales. In England and Northern Ireland, the tax holiday has been extended until 30 June 2021 after which the threshold will decrease to £250,000 until 30 September 2021. From 1 October 2021, the Stamp Duty thresholds will revert back to what they were before 8 July 2020."

Average home Prices in the UK peaked at £250,000 in December 2020.

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