Annual UK house price growth cooled in July as the rush to move home before the stamp duty holiday ended began to fade, but it remained in double digits as demand from buyers continued. The Nationwide house price index slipped to 10.5 per cent in July from 13.4 per cent the previous month, while seasonally adjusted prices fell 0.5 per cent month on month, bringing the average price of a home to £244,229.  The price of homes is now close to a record high relative to incomes.

Oddly however whilst market commentators like to focus upon the stamp duty holiday as a key driver, the Nationwide figures showed that “savings” from the tax break were dwarfed by an increase in the price of homes. The cost of a typical UK property increased by £24,500 between July 2020 and June 2021, while the stamp duty saving was £1,900. Data from HM Land Registry highlighted that higher priced properties drove activity during the pandemic. The number of transactions involving builds of £500,000 or higher increased 37 per cent in the year to March 2021, compared with 2 per cent for all properties.

Robert Gardner, Nationwide’s chief economist, said underlying demand was likely to “remain solid” in the near term, because of low borrowing costs, and a lack of housing supply in the market. The potential for rising unemployment and the end of the stamp duty holiday would likely soften prices, he added, but sustained demand meant any falls were far from assured. “As we look toward the end of the year, the outlook is harder to foresee.”