The UK property market has recorded its highest monthly rise in house prices in 16 years to reach new all-time highs, according to Nationwide.
With the market seemingly continuing its post-lockdown recovery, Nationwide said house prices rose by 2% in August, taking the average to £224,123.
That’s more than the 1.5% rise recorded in July, just a month before.
Nationwide said the recovery in housing market activity had been “unexpectedly rapid”.
“This rebound reflects a number of factors – pent-up demand is coming through, where decisions taken to move before lockdown are progressing,” said Nationwide’s chief economist, Robert Gardner.
He added that “behavioural shifts” could be boosting activity, with some people reassessing their housing needs after life in lockdown.
“These trends look set to continue in the near term, further boosted by the recently announced stamp duty holiday, which will serve to bring some activity forward.
“However, most forecasters expect labour market conditions to weaken significantly in the quarters ahead as a result of the after-effects of the pandemic and as government support schemes wind down.
“If this comes to pass, it would likely dampen housing activity once again in the quarters ahead.”
“Barnstorming recovery”
The 2% rise in house prices seen in August is the highest since February 2004, when they rose by 2.7%.
Overall, annual house-price growth in the UK now stands at 3.7%.
Market commentators have had mixed reactions to the figures.
Lucy Pendleton, director of estate agents James Pendleton, said: “Buyers emboldened by the stamp duty holiday have been engaged in a pitched battle for property, delivering a barnstorming recovery for the market.
“A stunning proportion of properties are now going for asking price or more, and offers are flooding in.
“It’s like lockdown was a bad dream.”
Meanwhile, Andrew Montlake, managing director of mortgage broker Coreco, said: “As strong as the property market is right now, it will not last.
“Demand is understandably strong after lockdown and the added bonus of the stamp duty holiday, but unemployment is rising by the day and the economic outlook is highly uncertain as the furlough scheme ends.
“In the final months of the year, we will start to see a reversal in the current rate of house price growth.”
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