Average UK house price reached record £238,000 in July

Average UK house prices hit a new high of £238,000 in July, according to official figures.

The Office for National Statistics (ONS) said property values increased by 2.3% over the year to July, down from 2.9% in June.

Average house prices in England increased over the year to £255,000 (2.5% annual growth), in Wales to £170,000 (3.6%), in Scotland to £155,000 (0.4%) and in Northern Ireland to £141,000 (3.0%).

The West Midlands (4.3%) was the English region with the highest annual growth, while the South East (1.0%) had the lowest.

The average house price in London increased by 1.3%.

London house prices remain the most expensive at an average of £485,000.

Within England, the North East continued to have the lowest average house price, at £132,000, and remained the only English region yet to surpass its pre-economic downturn peak of July 2007.

The ONS said its July figures will not reflect the impact of a stamp duty holiday that was introduced that month. This is because the index is based on completed sales, and house purchases typically take six to eight weeks for this to happen.

30 PHOTOS
Pictures of the week: October 4- 10
See Gallery
Pictures of the week: October 4- 10
People walk past a sign that refers to COVID-19 closures in London, Friday, Oct. 9, 2020. The British economy grew by far less than anticipated during August, raising concerns that the recovery from the coronavirus recession was already stuttering even before the reimposition of an array of lockdown restrictions. (AP Photo/Frank Augstein)
England's Danny Ings, laying on the pitch, scores his team's third goal, during the international friendly soccer match between England and Wales at Wembley stadium in London, Thursday Oct. 8, 2020. England won the match 3-0.(Glynn Kirk/Pool via AP)
Scotland's Kenny McLean, right, celebrates with Scotland goalkeeper David Marshall after scoring from a penalty shot during the Euro 2020 playoff semifinal soccer match between Scotland and Israel, at the Hampden stadium in Glasgow, Scotland, Thursday, Oct. 8, 2020. (AP Photo/Scott Heppell)
A man cycles past the Kalliopi Lemos �Bag of Aspirations� Mild steel and stainless steel, a giant handbag sculpture on display on the corner of New Bond Street and Brook Street in London. (Photo by Dave Rushen / SOPA Images/Sipa USA)
LONDON, ENGLAND - OCTOBER 07: Performers on the Ellis Island stage during the "Lockdown Town" Launch Night at One Night Records on October 07, 2020 in London, England. "Lockdown Town" is London's first socially-distanced immersive live music event and venue. (Photo by Tristan Fewings/Getty Images)
VIRGINIA WATER, ENGLAND - OCTOBER 08: Patrick Reed of The United States of America prepares to play his second shot on the 9th hole during Day One of the BMW PGA Championship at Wentworth Golf Club on October 08, 2020 in Virginia Water, England. (Photo by Andrew Redington/Getty Images)
EDITORIAL USE ONLY Claire Whitaker OBE, Southampton UK City of Culture Bid Director (2nd right) and Councillor Satvir Kaur (3rd right) are joined by musicians Tyrone (left) and Warbz (right), dancer and artistic director Zoie Golding (2nd left) and chef Shelina Permalloo (3rd left) launch Southampton's bid to become the UK City of Culture 2025, outside Southampton's Bargate.
The London Eye on the south bank of the river Thames, as the sun rises, in London, Wednesday, Oct. 7, 2020. (AP Photo/Alberto Pezzali)
A woman wears a face mask as she sits on a bus, in London, Wednesday, Oct. 7, 2020. Like other countries in Europe, the U.K. has seen rising coronavirus infections over the past few weeks, which has prompted the government to announce a series of restrictions, both nationally and locally, to keep a lid on infections. (AP Photo/Alberto Pezzali)
Tottenham Hotspur's Ria Percival, left, and London's Harley Bennett challenge for the ball during the women's Continental League Cup match between Tottenham Hotspur and London City Lionesses in London, Wednesday, Oct. 7, 2020. (AP Photo/Frank Augstein)
A primates head part of Patrick Goddard�s Humans-Animals-Monsters sculpture during the Frieze Sculpture 2020 exhibition at Regent's Park. (Photo by Dave Rushen / SOPA Images/Sipa USA)
BLACKPOOL, ENGLAND - OCTOBER 06: People wearing face masks play games in an amusement arcade on October 06, 2020 in Blackpool, England. This year to help boost the tourism trade, which has been hit by the Covid-19 pandemic, Blackpool Illuminations will remain on display until January, two months longer than normal. (Photo by Christopher Furlong/Getty Images)
NORTHWICH, UNITED KINGDOM - OCTOBER 06: A mannequin wearing a face mask and nurse's uniform stands next to a sign supporting the NHS, stands in a field during the Covid-19 pandemic on October 06, 2020 in Northwich, United Kingdom. (Photo by Christopher Furlong/Getty Images)
A woman in protective face mask is seen shopping by a stall at Lewisham street market as the second wave of Coronavirus hits London, England on October 6, 2020. (Photo by Dominika Zarzycka/NurPhoto via Getty Images)
Boscombe pier is silhouetted as dawn breaks over Boscombe beach in Dorset. (Photo by Andrew Matthews/PA Images via Getty Images)
Australian street artist James Cochran, also known as Jimmy C, poses for a portrait as he finishes working for the day, with just a coat of varnish left to finish applying on his London cityscape mural on a Network Rail wall by Blackfriars Station, in London, Monday, Oct. 5, 2020. It is the first time Cochran has painted a cityscape as a piece of street art outside of his studio and has taken six days to paint working through wet and rainy conditions. (AP Photo/Matt Dunham)
Two swimmers run into the sea as the sun rises over Boscombe beach in Dorset. (Photo by Andrew Matthews/PA Images via Getty Images)
Daniel Marc Hooper, better known as environmental activist Swampy, assists fellow anti-HS2 tree protectors from a makeshift tree house about sixty feet above ground at a wildlife protection camp in ancient woodland at Jones Hill Wood on 5 October 2020 in Aylesbury Vale, United Kingdom. The Jones Hill Wood camp, one of several protest camps set up by anti-HS2 activists along the route of the £106bn HS2 high-speed rail link in order to resist the controversial infrastructure project, is currently being evicted by National Eviction Team bailiffs working on behalf of HS2 Ltd. (photo by Mark Kerrison/In Pictures via Getty Images)
A surfer makes their way into the sea as the sun starts to rise over Boscombe beach in Dorset. (Photo by Andrew Matthews/PA Images via Getty Images)
Actress Jennifer Saunders, front center, and five colleagues carry out a 'silent stand' outside the Gielgud Theatre, London, Monday Oct. 5, 2020, on behalf of the UK theatre industry. The two minute stand is to show solidarity with those in the UK theatre industry who have lost their jobs and received no government support, to highlight the lack of government guidance for the reopening of theatres, an to ask the government to provide the industry with a date when theatres can reopen without social distancing. (AP Photo/Alastair Grant)
Japan's Hiroki Nishida in action during the Elite Wheelchair Race during the Virgin Money London Marathon around St James' Park. (Photo by Ian Walton/PA Images via Getty Images)
GALLOWAY, NEW JERSEY - OCTOBER 04: Mel Reid of England (C) is doused with champagne after winning the ShopRite LPGA Classic presented by Acer on the Bay Course at Seaview Hotel and Golf Club on October 04, 2020 in Galloway, New Jersey. (Photo by Michael Cohen/Getty Images)
Runners pass cardboard cutouts of Britain's Queen Elizabeth II and Prince William during the London Marathon in London, England, Sunday, Oct. 4, 2020. Athletes are competing on a 26.2-mile (42.2-kilometer) closed-loop course consisting of 19.6 clockwise laps around St. James' Park. The traditional course along the River Thames was scrapped because of the coronavirus pandemic and only elite men and women are competing and no spectators are permitted. (John Sibley/Pool via AP)
A resident in Rothbury in Northumberland bails water from their vehicle after the River Coquet burst its banks. The UK's wet weekend will continue as a weather warning for rain across parts of Wales and England has been extended.
Kenya's Brigid Kosgei, left, and Kenya's Ruth Chepngetich race along Horseguards Parade during the London Marathon in London, England, Sunday, Oct. 4, 2020. Athletes are competing on a 26.2-mile (42.2-kilometer) closed-loop course consisting of 19.6 clockwise laps around St. James' Park. The traditional course along the River Thames was scrapped because of the coronavirus pandemic and only elite men and women are competing and no spectators are permitted. (Adam Davy/Pool via AP)
A van is stuck in flood water after the Padbury brook burst its banks near Buckingham, England, Monday Oct. 5, 2020. Heavy rain over the weekend has brought flooding and travel disruption to parts of Britain. (Steve Parsons/PA via AP)
Cars make their way through a flooded road in Claudy, County Londonderry. The UK's wet weekend will continue as a weather warning for rain across parts of Wales and England has been extended.
Manchester United's manager Ole Gunnar Solskjaer reacts after Tottenham scored their sixth goal during the English Premier League soccer match between Manchester United and Tottenham Hotspur at Old Trafford in Manchester, England, Sunday, Oct. 4, 2020. (Oli Scarff/Pool via AP)
BIRMINGHAM, ENGLAND - OCTOBER 04: Ben Duckett and Dan Christian of Notts Outlaws celebrate victory in the Vitality Blast 20 Final between Surrey and Notts Outlaws at Edgbaston on October 04, 2020 in Birmingham, England. (Photo by Alex Davidson/Getty Images)
Mark Smith 25228 seen running past Downing Street, London taking part in the Virgin Money Virtual London Marathon running for the St Lukes Hospice. (Photo by Dave Rushen / SOPA Images/Sipa USA)
HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

It also warned that the impact of the coronavirus pandemic on housing transactions may mean there need to be larger than usual revisions to the estimates made in the index.

The report also noted that there was a shift towards transactions on cheaper properties in April this year.

It suggested that, as people were advised not to move during the tightest restrictions, sales completed during that time may have been more concentrated than usual among those without complicating factors such as a housing chain.

For example, first-time buyers may have been freer to complete transactions than existing home-owners who typically live in more expensive homes.

It said figures from UK Finance indicate that purchases by former owner-occupiers fell the most sharply in April 2020, at 61% annually, compared with a fall of 53% for first-time buyers and 54% for buy-to-let purchases.

The report said the subsequent price increases in June may reflect some degree of pent-up demand following the easing of lockdown restrictions, particularly at the higher end of the price scale.

The ONS had to temporarily suspend publication of its house price index due to property market restrictions linked to the Covid-19 pandemic.

It has since been publishing house price studies, which would normally come out each month, on a fortnightly basis to catch up.

Having now caught up, the next index will be released alongside other inflation reports on October 21.

Jamie Durham, an economist at PwC, said: "Looking forward, pent-up demand and the stamp duty holiday may continue to help support demand over the coming months.

"However, as the furlough scheme is replaced by the Job Support Scheme and businesses start to adjust to a new longer-term dynamic, unemployment may creep up, limiting demand and weighing on the housing market.

"New PwC data shows that 20% of people say they are now less likely to purchase a home over the next couple of years compared to before the national lockdown in March 2020.

"With so much uncertainty around how the pandemic will evolve, predicting house prices is challenging. However, assuming there is a relatively limited second peak in Covid-19 cases, with no nationwide lockdown, house prices could grow nationally by around 1% in 2021.

"If further measures are introduced to control the spread of the virus, house prices could fall in 2021."

Read Full Story Click here to comment

FROM OUR PARTNERS