House prices soar as buyers seek more space

The average price of a UK house has jumped by 7.3% over the past year.

Surging demand for houses will last well into 2022 as buyers continue to look for more room after being cooped up during the pandemic, says property website Zoopla.

A search for space has pushed up the average price of a house by 7.3% over the past year, reaching a new high of £230,700, it says.

While houses are proving popular, flats are less sought after. But properties of all kinds are in short supply, the property portal stressed.

"Demand for houses is twice as high as typically seen at this time of year between 2017 and 2019, accelerating away from demand for flats, creating a disparity in average price growth across the two property types," Zoopla said.

"House prices are being supported in part by a severe shortage of homes for sale, with stock levels down some 25% in the first half of the year compared to 2020."

The firm said that while house prices were surging, the growth in flat prices was lagging at 1.4% over the past year.

"The rise in demand for houses is something we saw in the first lockdown," Grainne Gilmore, head of research at Zoopla, told the BBC. "It's a reassessment among many homeowners of where they want to live."

Ms Gilmore said that with the rise of working from home, many people wanted a spare room that could become an office, while others were seeking garden space.

"A cohort of buyers has eroded the supply of family houses and put upward pressure on house prices more than flats over the past 12 months," she said. "That's a situation that we would expect to continue into 2022. We're still seeing very high levels of demand in the market, even now with more modest stamp duty savings."

The price of the average UK house has jumped by 30% since 2007, when a typical house cost just £177,300, according to Zoopla.

In June alone, house prices were up 5.4% year-on-year, although buyer demand dipped 9% in early July because of the stamp duty holiday coming to an end. Sales agreed this year are still 22% ahead of average levels in 2020.

Mark Hayward, chief policy adviser at Propertymark, the professional body for the property sector, said there were typically 19 buyers per available property.

“We are very firmly still in a strong sellers’ market; properties are being snapped up swiftly and at record high prices. We do anticipate a rebalancing of the market over the coming months as the stamp duty holiday continues to be phased out and people return to normality,” he said.