AVERAGE UK house prices hit a new high of £238,000 in July, according to official figures.
The Office for National Statistics (ONS) said property values increased by 2.3% over the year to July, down from 2.9% in June.
Average house prices in Scotland increased over the year to £155,000 (0.4% annual growth), in England to £255,000 (2.5% ), in Wales to £170,000 (3.6%) and in Northern Ireland to £141,000 (3.0%).
The ONS said its July figures will not reflect the impact of a stamp duty holiday that was introduced that month. This is because the index is based on completed sales, and house purchases typically take six to eight weeks for this to happen.
It also warned that the impact of the coronavirus pandemic on housing transactions may mean there need to be larger than usual revisions to the estimates made in the index.
The report also noted that there was a shift towards transactions on cheaper properties in April this year.
It suggested that, as people were advised not to move during the tightest restrictions, sales completed during that time may have been more concentrated than usual among those without complicating factors such as a housing chain.
For example, first-time buyers may have been freer to complete transactions than existing home-owners who typically live in more expensive homes.
It said figures from UK Finance indicate that purchases by former owner-occupiers fell the most sharply in April 2020, at 61% annually, compared with a fall of 53% for first-time buyers and 54% for buy-to-let purchases.
The report said the subsequent price increases in June may reflect some degree of pent-up demand following the easing of lockdown restrictions, particularly at the higher end of the price scale.
Jamie Durham, an economist at PwC, said: “With so much uncertainty around how the pandemic will evolve, predicting house prices is challenging.
“However, assuming there is a relatively limited second peak in Covid-19 cases, with no nationwide lockdown, house prices could grow nationally by around 1% in 2021.
“If further measures are introduced to control the spread of the virus, house prices could fall in 2021.”
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