House prices soared by 13.2% or £31,000 in the year to June, marking the highest annual growth since 2004, the latest index from the ONS shows.
Average property prices hit £265,668 in June, up by 4.5% on the previous month as buyers rushed to get deals through before phasing out of the stamp duty holiday after June 30.
Wales saw the strongest annual growth up by 16.7% to £195,000, followed by England where prices rose 13.3%, Scotland where they were up by 12% to £174,000 and Northern Ireland where they rose by 9% to £153,000.
Yopa chief analyst Mike Scott says: “The official government house price index for June shows a sharp increase in UK house prices, with the annual rate of growth rising to 13.4%, the highest since 2004.
“Only London is lagging significantly behind, though prices in the capital are still growing by an annual rate of 6.3%.
“It should however be noted that June 2020, the month used for comparison, was still significantly affected by the near-total closure of the housing market between late March and mid May, and so the year-on-year figures may be more volatile than usual.
“Purchases completed in June were of course also boosted by the rush to beat the deadline for the removal of all tax savings in Wales and the majority of the potential stamp duty savings in England and Northern Ireland.
“We therefore believe that this figure is somewhat overstated, and the true underlying annual rate of house price growth is closer to the 8%-10% range, which is of course still very high, substantially higher than the rate of inflation.
“We expect that the reported annual rate of growth will have fallen back to somewhere in this range by the end of the year.
“We expect strong house price growth to continue at least into the first quarter of 2022 as the effects of the pandemic and the recovery continue to work their way through the housing market.”
Conor Murphy, CEO, Smartr365 chief executive Conor Murphy says: “Today’s findings are to be celebrated and we hope that house prices will continue to grow in the coming months.
“Market momentum remains strong and I’m confident that the availability and pricing of credit will ensure the market retains its buoyancy post-September”
“There are now just six weeks until the nil-rate band reverts to the £125,000 threshold, making it essential that brokers adopt tech solutions to speed up the application process and help as many buyers meet the deadline as possible.
“Automatic DIPs, digital ID verification and open banking are amongst the countless ways that tech can save brokers precious time to do this.
“The stamp duty holiday has shown that disruption can be a force for good and it’s time the mortgage market took the same approach to digitalisation.”