The average house price surged by £28,000 in the year to September to hit another record high, according to latest government figures.
The 11.8 per cent rise is up from 10.2 per cent recorded in August, the Office for National Statistics Index shows.
The typical home has now reached an all-time high of £270,000 – a £7,000 increase from the end of August. It has also smashed the previous record of £264,000 set in June 2021.
Price rise: The average UK home shot up in value by 11.8% in the year to September
In England, the average price is even higher at £288,000, an 11.5 per cent increase over the last year.
In Wales and Scotland, prices have risen even more in the past 12 months however.
Welsh homes have increased by 15.4 per cent to £196,000, while homes in Scotland have gone up by 12.3 per cent to £180,000.
In Northern Ireland they have risen by 10.7 per cent to £159,000.
The ONS figures lag a month behind other property price indices, including ones from Halifax and Nationwide Building Society.
House price growth in the UK is on the increase again, following a slight dip in July
Price rises continue to be driven by the search for more space that first began at the start of the pandemic, as well as a shortage of homes coming to the market which has driven up competition for those that are for sale.
Peter Beaumont, chief executive of The Mortgage Lender, said: ‘House prices continue to inflate as the market is squeezed from all corners.
‘There are still not enough homes on the market to meet the ever-growing demand from buyers, which until it evens out, will keep putting upward pressure on asking prices.’
On the market: This 7-bed home in Stourbridge, West Midlands, is listed on Rightmove with an asking price of £450,000. It has a sizeable one-bed, one-bath annexe to the rear
In Ulverston, Cumbria, this three-bed detached home is marketed at £650,000
Coming in just over the national average house price, this Victorian three-bed terraced home in Norwich is listed on Rightmove with an asking price of £290,000
In Chandler’s Ford, Hampshire, this three-bed bungalow is on sale for £600,000
A three-bed end-of-terrace in Barry, South Wales, can be snapped up for £195,000
September was the final month that property buyers were able to benefit from the Government’s stamp duty holiday, which has driven up transaction numbers and therefore prices since it was introduced in July 2020.
However, the saving was limited at that time. Buyers were able to cut their tax bill by up to £15,000 between July 2020 and June 2021, but this was tapered down to £2,500 between July and September 2021.
Experts said that the elimination of this tax benefit, as well as rises in mortgage rates due to speculation about an increase in the base rate of inflation, could cause house price growth to slow in the months ahead.
More up-to-date figures from Rightmove this week suggested that asking prices were slipping as the market entered a ‘winter lull’.
Miles Robinson, head of mortgages at online broker Trussle, said: ‘The months ahead will likely be more difficult as buyers may start to view the market with caution.
‘We have already seen the much-publicised sub 1 per cent mortgage deals begin to disappear, and a rise in interest rates is certainly on the cards.
‘Alongside this, it looks set to be a difficult winter for household finances.’
Mortgage rates hit record lows of as little as 0.78 per cent in recent months, but are now starting to edge up with few deals now available at less than 1 per cent.
However, rates remain cheap in a historical context, and those remortgaging are still likely to find rates similar to, or cheaper than, their previous one.
North West homes rise £10k in a MONTH
Looking at specific regions, North West England continues to record the largest price increases.
It saw an increase of 16.8 per cent in the year to September, up from 11.6 per cent in August, with the average cost of a home breaking the £200,000 barrier and now sitting at £203,611.
This was an increase of nearly £10,000 in a month.
Tale of two cities: London remains the UK’s most expensive housing market, but the North West has seen more rapid growth since the beginning of the coronavirus pandemic
The lowest annual growth was seen in London, where average prices increased by 2.8 per cent over the year to September 2021, down from 6.7 per cent in August 2021. This represents the lowest annual growth in London since July 2020.
Nicky Stevenson, managing director at estate agents Fine & Country, said this gap was set to close.
She said: ‘It’s incredible to see such a yawning gap between the house price performance of the North West and London in percentage terms and it’s nailed on that this gulf will close fast over the next year.
‘If you consider for a moment the impressive 5.6 per cent growth London exhibited the previous month, it’s easy to see that this contraction was a rebalancing that made up for an unusual spike over the busy summer season.
‘There could be a bit of a resurgence on the cards for the capital as we head into next year but growth nationally is expected to slow.’
Despite being the region with the lowest annual growth, London’s average house prices remain the most expensive of any region in the UK at an average of £507,000.
The North East continued to have the lowest average house price, at £153,000.