House prices are rising at their fastest rate in almost 17 years after a dash to beat a stamp duty holiday deadline in England and Northern Ireland pushed the annual rate of property inflation to 13.2% in June.
Figures from the Office for National Statistics showed the average house price across the UK increased by £31,000 to £266,000 over the past year – or just over £2,500 a month.
House price inflation using Land Registry data stood at 2% in June 2020 but has gradually increased over the previous 12 months. Pent-up demand, the search for bigger homes as a result of the pandemic, and the decision by the chancellor, Rishi Sunak, to waive stamp duty on properties worth less than £500,000 have all contributed to the rise.
The ONS said the sharp jump in house price inflation from 9.8% in May was linked to the start of July deadline for the threshold for paying stamp duty to drop to £250,000, ahead of a return to its pre-crisis level of £125,000 from October.
Wales showed the biggest jump in house prices of the four countries of the UK, registering property inflation of 16.7% in the past year. The price of a home rose by 13.3% in England, 12% in Scotland and 9% in Northern Ireland.
The English region with the hottest property market in the past year has been the north-west, where prices were up by 18.6%. London, the part of the UK hardest hit by the repeated coronavirus lockdowns of the economy, recorded the smallest annual increase, 6.3%.
According to ONS figures, the increase in house prices over the past year is almost equivalent to the average weekly earnings of a full-time employee in the UK.