House prices up 2.1% across the UK
There were expectations that house price rises would ease as the Stamp Duty holiday threshold lowered in July, but that didn’t happen. In fact, the Nationwide Building Society has revealed that the average house price has increased by £5000 in August, amounting to a monthly rise of 2.1% which is actually the second-highest rise in fifteen years.
Nationwide attributes this rise to there being a lack of properties on the market, as well as home buyers looking to purchase property under the value of £250,000 wanting to complete their purchases before the stamp duty threshold returns to its pre-COVID normal of £125,000 in October.
House prices are now around 13% higher than when the pandemic began, according to Nationwide’s chief economist, Robert Gardner. This is due to several factors, including :
- Low interest rates
- The need for more space caused by lockdown
- Various incentives offered by the Chancellor, Rishi Sunak
Why have Central London prices not followed suit?
The Central London market is usually awash with overseas investors, a demographic which, understandably, was not purchasing during the pandemic.
Their absence has meant central London hasn’t seen the price rises seen over the rest of the UK. Reports suggest that this part of the market is starting to pick up again, but with overseas buyers having different priorities than before, with the location being close to family and schools overtaking the desire for a short commute to offices.
Although it seems like this part of the market may be picking up, there are also reports of some developers building show-homes across the globe, to gain the confidence of potential purchasers, and avoid them needing to travel to the UK in order to be able to see property.
Energy ratings currently having minimal effect
Also in the Nationwide housing index report, they’ve begun to look at the impact of a property’s energy efficiency rating on price. Despite being a huge industry talking point currently, it doesn’t seem like the energy rating of a property has much bearing on the overall value at the moment, with noticeable impact only applying to the best and worst energy ratings.
It’s worth bearing in mind however, that they think this could all change as environmental factors in personal buying choices become more and more important, particularly if the government choose to offer incentives in future to help the UK meet the target of reaching net carbon zero by 2050.