Property prices rise by 8.5 percent

According to the Office for National Statistics property prices rocketed by 8.5pc in December - the highest annual growth rate recorded since October 2014.

 

A desire for space following the shift to home working combined with the temporary incentive of the stamp duty holiday meant demand for houses led to a price surge. Last year's property market boom gave a particular boost to Welsh sellers, as home values jumped 10.7pc, hitting £184,000.

 

In England the average growth rate was 8.5pc, Scotland's was 8.4pc and Northern Ireland 5.3pc. London was the weakest English region, with growth hitting just 3.5pc. First announced in July 2020, the tax cut particularly benefits higher value buyers in England and Northern Ireland. Prices of detached homes increased by 10pc year on year in December, double the rate of growth for flat prices.

 

As buyers used the temporary stamp duty holiday to purchase larger homes, the average UK property value hit a record high of £252,000. The tax break is set to end next month; however, the Government is reportedly considering allowing a six-week grace period for deals already agreed by March 31.

 

The data reflects completed transactions, meaning the number of sales in December were likely agreed in late summer and early autumn, at the peak of the post-lockdown buying frenzy. However, estate agents have warned that the movement is running out of steam as lockdown bites and the approaching stamp duty holiday ends on March 31.

 

According to the property website Rightmove, extending the stamp duty holiday by six weeks would mean that between 120,000 and 160,000 additional buyers in England would benefit, saving an estimated £1bn in duties.

 

Some buyers have been unable to complete because of bottlenecks in the overloaded housing market, with Rightmove figures showing that one in five who agreed to a purchase in July last year has still not completed. Hundreds of thousands of sales are at risk of collapsing if buyers are landed with tax bills of up to £15,000.