The average UK house price leapt by 15.5% annually in July, marking the biggest increase in 19 years.
The percentage increase was around double the rate recorded in June, when the typical property value increased by 7.8% annually.
The Office for National Statistics (ONS) said the inflation rate was the highest recorded since May 2003.
The rise in annual inflation was mainly because of “a base effect” from the falls in prices seen this time last year, as a result of changes in the stamp duty holiday, the report said.
Average UK house prices increased by £6,000 between June and July this year – compared with a fall of £13,000 between the same months last year.
The average UK house price was £292,000 in July 2022, which is £39,000 higher than this time last year.
Average house prices increased over the year in England to £312,000 (a 16.4% annual increase), in Wales to £220,000 (17.6%), in Scotland to £193,000 (9.9%) and in Northern Ireland to £169,000 (9.6%).
A temporary “nil rate” tax threshold under the stamp duty holiday in England and Northern Ireland was reduced from July last year, before the holiday was completely phased out from October 2021.
The equivalent holiday in Scotland ended on 31 March 2021.
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, confirmed that distortions from the end of the most generous period of the stamp duty holiday last June are playing a big role in price rises.
“There was a burst of demand last June, and people rushed to get sales over the line before the deadline - pushing prices up - as a result, we had a lull in July.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “With 95.5% of mortgages taken on fixed rates during the second quarter of the year, according to the Financial Conduct Authority, borrowers envisage further rate rises and are taking action to protect themselves.”
Simon McCulloch, chief commercial and growth officer at conveyancer platform Smoove, said: “The dynamics of the UK property market continue to be determined to some extent by a lack of supply, which should prop up prices to a degree even in the event of a prolonged recession.”
ONS figures also showed that private rental prices paid by tenants in the UK rose by 3.4% in the 12 months to August 2022, up from 3.3% in the 12 months to July 2022.
Private rental prices increased by 3.4% in England, 2.5% in Wales and 3.6% in Scotland in the 12 months to August.
Karen Noye, financial planning consultant at Quilter, said: “The housing market has so far remained resilient despite the ongoing cost-of-living crisis.
“While the latest UK inflation data released this morning showed a slight fall to 9.9% last month, a higher peak is still expected to materialise over the coming months and as such the Bank of England is expected to continue hiking interest rates and the current resilience may well falter as a result.
“Coupled with rising interest rates, soaring energy prices will also make buyers more cautious.”
Mike Scott, chief analyst at estate agency Yopa, said the firm expects house prices will continue to grow for the remainder of 2022, “though the annual rate of growth will quickly fall back from July’s 15.5% figure to something that’s in single figures”.
Tom Bill, head of UK residential research at Knight Frank, added that rising mortgage rates “will ultimately curb the double-digit price growth seen over the last two years although we don’t expect prices to fall”.
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