Property Market Update: house prices and construction output

House price growth

The Office for National Statistics House Price data for July 2021 revealed year-on-year growth from 2020, but a dip compared to the previous month.

UK House Prices Map

Average house prices increased across all four countries (see map to the right).

UK average house prices increased 8.0% over the year to July 2021, down from 13.1% in June 2021. The average UK house price was £256,000 in July 2021, £19,000 higher than July 2020. This follows a record high of £265,000 in June 2021.

End of Stamp Duty Holiday

On 3 March 2021, the Chancellor of the Exchequer, Rishi Sunak, announced an extension to the Stamp Duty holiday in England and Northern Ireland. The tax holiday was extended until 30 June 2021, after which the threshold decreased to £250,000 until 30 September 2021. From 1 October 2021, the Stamp Duty thresholds reverted to what they were before 8 July 2020.

As the tax breaks were originally due to conclude at the end of March 2021, it is likely that March’s average house prices were slightly inflated as buyers rushed to ensure their house purchases were scheduled to complete ahead of this deadline.

Building Materials

Earlier this year, The Department for Business, Energy & Industrial Strategy released their monthly statistics of building materials and components. This is coupled with the ONS data on Construction Output and Employment for July 2021.

In terms of construction materials, imported plywood had seen the greatest price increase between July 2020 to July 2021 at 87%. Meanwhile screws and electric water heaters decreased in price (-14.1% and -1.9% respectively). The construction material price changes were mostly reflected in Repair and Maintenance which rose by 23% between July 2020 to July 2021, followed by New Housing at 19.8%.

Construction Output

Monthly construction output fell by 1.6% in July 2021 compared with June 2021, falling to £13,660 million. This follows the 1.3% monthly decline in June 2021 and is the fourth consecutive decline in monthly construction output. The 1.6% fall in construction output in July 2021 represents a fall of £218 million in monetary terms compared with June 2021.

Read more on these topics in the first issue of our newsletter South East Property.

Read South East Property Issue 1

For further information, please contact our Construction and Real Estate team on 01293 227670.