According to Halifax, buyers continued to “race for space”, so UK home prices jumped in September at the fastest monthly rate since February 2007.
Data from the bank showed that the average sale price of a home rose by £4,400 to a new record high of £267,587.
Property value was up 1.7 per cent in the month and 7.4 per cent in the year to September. Detached homes were up 8.8 percent, or £41,000, over the year.
Halifax said the stamp duty holiday, which started easing in July before ending in October, was one of several factors that pushed up prices.
The tax cut has attracted criticism for fueling a property boom that has made homes less affordable.
Halifax said lower borrowing costs and the desire for larger properties have also increased the average selling price.
The bank expects the continued shortfall in supply to support prices next year. Estate agents have reported a further shortfall in the supply of homes coming up for sale since the stamp duty holiday was reduced.
“The ‘space race’ as people changed their preferences and lifestyle choices undoubtedly had a huge impact,” said Halifax Managing Director Russell Galli.
“Looking at the change in prices in the last one year, the prices of flats have increased by just 6.1 per cent, as compared to 8.9 per cent for semi-detached properties and 8.8 per cent for detached ones.
“This translates into a cash increase for detached properties of around £41,000, compared to just £6,640 for flats.
“Against rising pressure on cost of living and an imminent increase in taxes, a moderation in demand can be expected in the coming months, with some industry measures already indicating lower levels of buyer activity.
“Nevertheless, lower borrowing costs and improved labor market prospects for those already employed are likely to provide support.”
Martin Beck, senior economic advisor at EY Items Club, was more cautious about the price outlook.
“There are mounting headwinds for further home price increases,” he said. “The spending power of households faces both rising cost of living and an increase in personal taxation due next April.
“The weak outlook for income means that housing affordability, on measures such as the ratio of prices to income, will have more drag.”
Credit: www.independent.co.uk /