House Prices Up 8.6% in Latest UK House Price Index

England house prices grew by 8.7% in the year to February 2021, up from 8.0% in January 2021. England house prices were growing faster than the UK rate of 8.6% in the year to February 2021.

The North West was the fastest growing region with annual growth of 11.9% in the year to February 2021. The lowest annual growth was in London, where prices increased by 4.6% over the year to February 2021.

On a non-seasonally adjusted basis, average house prices in England increased by 0.2% between January and February 2021, compared with a decrease of 0.5% during the same period a year earlier (January and February 2020). On a seasonally adjusted basis, average house prices in England increased by 0.4% between January and February 2021.

Comparing the provisional volume estimate for December 2019 with the provisional estimate for December 2020, volume transactions increased by 16.2% in England. UK volume transactions increased by 18.3% over the same period.

UK Property Transaction Statistics published by HM Revenue & Customs (which differ in coverage but are more complete for this period) report that on a non-seasonally adjusted basis, volume transactions increased by 28.9% in England in the year to December 2020.

Across England, detached and semi-detached houses showed the biggest increase out of all property types, both growing by 9.2% in the year to February 2021 to £410,000 and £254,000 respectively. The lowest annual change was in flats and maisonettes which increased by 6.8% in the year to February 2021 to £236,000.

As with other indicators in the housing market, which typically fluctuate from month to month, it is important not to put too much weight on one month’s set of house price data.

Founder and CEO of GetAgent.co.uk, Colby Short, commented:

“The market remains in a very strong position despite monthly price growth sitting still and this was no doubt down to two factors.”

“The first being the continued difficulties in securing a buyer caused by lockdown restrictions and the second being a drop in momentum on the run-up to what would have been the stamp duty holiday deadline.”

“While the latter will no doubt have an impact when it does arrive, it’s far more likely price growth will hit a bump in the road rather than a brick wall.”

“The main reason for this is a severe shortage of housing stock available to satisfy demand and so even when buyer numbers reduce, we’re likely to see demand continue to outstrip supply which will keep the rate of house price growth stable.”

Managing Director of Barrows and Forrester, James Forrester, commented:

“Many will be quick to panic at the sight of a month on month price growth stall but this simply doesn’t portray the overall health of the market, in the same way our efforts in combatting Covid can’t be assessed on such a short term basis.”

“The long term picture shows a market in very good health, driven by strong regional performances across the board, from the South West, the East Midlands, Yorkshire and the Humber and the North West.”

“As we enter what is often the busiest time of year, we can expect the market temperature to rise and house prices to follow suit for the remainder of the year, at the least.”

Director of Benham and Reeves, Marc von Grundherr, commented:

“Although London continues to trail the rest in terms of the rate of house price growth we’re certainly starting to see an early indication that the market is on the up.”

“Tenant and homebuyer demand has started to lift during the first quarter of the year and this is only likely to grow stronger as lockdown restrictions are lifted and a return to professional and social normality continues.”

“While the market isn’t running as hot as other UK regions at present, this should work in the favour of the London market in the long run.”

“A far more steady return to form is likely to be made and this will ensure that any crash landing as a result of the stamp duty holiday ending is going to minimised within the capital.”

Key Stats:

• The average price of a property in England was £268,291
• The annual price change of a property in England was 8.7%
• The monthly price change of a property in England was 0.2%
• The index figure for England (January 2015 = 100) was 132.3

Average house prices in England increased by 8.7% in the year to February 2021, up from 8.0% in January 2021.

In London, average house prices increased by 4.6% in the year to February 2021, down from an increase of 5.7% in January 2021.

Annual price change by local authority for England

Low numbers of sales transactions in some local authorities and London boroughs, such as City of London, can lead to volatility in the series.

While we make efforts to account for this volatility, the change in price in these local levels can be influenced by the type and number of properties sold in any given period.

Geographies with low number of sales transactions should be analysed in the context of their longer-term trends rather than focusing on monthly movements.

Average price by local authority for England

In February 2021, the most expensive area to purchase a property was Kensington and Chelsea, where the average cost was £1.2 million.

In contrast, the cheapest area to purchase a property was Hyndburn, where the average cost was £92,000.

Annual price change by London borough

Average price by London borough

In February 2021, the most expensive borough to purchase a property was Kensington and Chelsea, where the average cost was £1.2 million.

In contrast, the cheapest borough to purchase a property was Barking and Dagenham, where the average cost was £324,000.

Average price change by property type